Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Great Western Railway (Additional Powers) Bill,

Lords Amendments considered, and agreed to,

Clyde Valley Electrical Power Bill [Lords],

To be read a Second time To-morrow.

Rhymney and Aber Gas Bill [Lords], Read a Second time, and committed.

Edinburgh Corporation (Tramways, etc.) Order Confirmation Bill,

Rothesay Tramways (Amendment) Order Confirmation Bill,

Read a Second time; and ordered to be considered To-morrow.

Oral Answers to Questions — INDIA

NEW DELHI (DECORATIVE WORK).

Mr. BAKER: 1.
asked the Under-Secretary of State for India whether he will give an undertaking that the work of decoration in New Delhi will be given to Indian artists and craftsmen?

The UNDER-SECRETARY of STATE for INDIA (Mr. Robert Richards): My Noble Friend feels sure that the Government of India will approach this question with every desire to encourage Indian arts and crafts.

ASSAM TEA PLANTATIONS (INDENTURED LABOURERS).

Mr. BAKER: 2.
asked the Under-Secretary of State for India what are the conditions of recruitment, rates of pay, hours of labour, and welfare conditions of the identured labourers employed in the tea plantations of Assam; whether it is the duty of any official of the Government to instruct the labourers as to the terms of their contract; and whether any steps are taken by the Government to see that the terms of the contract are kept by both employer and employed?

Mr. RICHARDS: The system of recruiting labourers under contract under the Assam Labour and Emigration Act has been discontinued for some time. It is not the duty of any Government official to instruct labourers as to the terms of any contract that they may wish to enter into, outside that Act. In the event of breaches of contract on either side, the ordinary remedy in the courts is available.

AKALI MOVEMENT.

Colonel Sir CHARLES YATE: 3.
asked the Under-Secretary of State for India whether his attention has been drawn to the misrepresentations and hatred of the Government displayed by the Akali propaganda published in the extremist Sikh Press and, considering that the organisation of the Akalis, have refused the conference and the generous terms offered by the Government through the Birdwood Committee and the elected Sikh members of the Punjab Legislative Council and by devoting itself to fanning the flame of anti-government hostility, has now grown into formidable danger to the other communities in the Punjab as well as to other sections of the Sikhs, will he state what special action is to be taken to maintain law and order in the Punjab?

Mr. RICHARDS: I am aware of the extreme writings of a section of the Press in connection with the Akali agitation. As regards the last part of the question, the policy of the Punjab Government, which has the full approval of the Government of India and of my Noble Friend, is to maintain order and public security by consistently applying the law against all offenders, and at the same time to neglect no means of arriving at a stable and equitable solution of matters in controversy, with due regard to all the interests that are affected.

Sir C. YATE: Is the hon. Gentleman aware that this Akali agitation has now become a purely political and revolutionary movement, without any religious features whatsoever, and will the Government of India take steps to put down this revolutionary movement?

Sir HENRY CRAIK: Is it not well to leave this matter to the Governor of the Punjab and his assistants on the spot?

Mr. RICHARDS: With regard to the second supplementary question, I think it is well. With regard to the first, it has always been partly political and partly religious.

Sir C. YATE: Does not the hon. Gentleman know that religion is quite out of it now?

SEDITION CHARGES, CAWNPORE.

Mr. LANSBURY: 4.
asked the Under-Secretary of State for India, whether the Secretary of State for India has now received copies of the evidence given in the recent trials for sedition at Cawnpore; and, if so, will he lay copies upon the Table of the House?

Mr. RICHARDS: The evidence referred to has not yet been received.

Mr. LANSBURY: 5.
asked the Under-Secretary of State for India whether he is aware that nearly 150 persons have been arrested in the Cawnpore district charged with sedition; and will he tell the House what is the actual nature of the charges preferred against these men?

Mr. RICHARDS: I have no information of any such arrests having been made in the Cawnpore district.

Lieut.-Commander KENWORTHY: Is the hon. Gentleman aware that these men are being, arrested because they advocated the land for the people?

Mr. RICHARDS: I have no information as to that.

Mr. LANSBURY: Will the hon. Gentleman make inquiries, seeing that it was a Reuter telegram that conveyed this information, and they are notoriously accurate?

Mr. RICHARDS: I will make inquiries

TRADE UNIONS.

Mr. R. RICHARDSON: 11.
asked the Under-Secretary of State for India whether any legislation is contemplated by the Government of India for legalising trade unions, and to enable such bodies to be protected from civil or criminal actions when performing trade union functions?

Mr. RICHARDS: The Government of India contemplate legislation enabling trade unions to register, and according
a large measure of protection from civil and criminal actions to such registered unions.

IMPRESSED LABOUR.

Mr. R. RICHARDSON: 12.
asked the Under-Secretary of State for India whether the system of impressed labour for Government work, either civil or military, still continues; and, if so, whether ho will lay upon the Table of the House a copy of the rules and ordinances governing it?

Mr. RICHARDS: Certain enactments of the Indian legislatures, copies of which will be placed in the Library, provide for the requisitioning of labour for emergencies, such as the repair of irrigation works, and in exceptional circumstances.

NAVAL, MILITARY AND AIR FORCES.

Mr. BATEY: 13.
asked the Under-Secretary of State for India whether any action has been taken on the resolution passed by the Legislative Assembly calling for the unrestricted admission of Indians to the naval, military, and air forces?

Mr. RICHARDS: Yes, Sir. The whole question of the admission of Indians to the various arms was carefully considered, along with other questions relating to the defence of India, in 1922, by the Committee of Imperial Defence, upon whose,
recommendations the existing policy of Indianisation was laid down by His Majesty's Government in 1923.

Mr. BATEY: 14.
asked the Under-Secretary of State for India whether, seeing that the War Office objected to the reduction of the military establishment of India by three cavalry regiments, and that as a consequence of such objections only two regiments have been removed despite the recommendations of the Retrenchment Committee, he will state the amount of the annual contribution which the War Office has agreed to make towards the cost of this regiment, and what proportion of the expense this contribution represents?

Mr. RICHARDS: The decisions on the Retrenchment Committee's recommendations for the reduction of the military establishment of India were not taken by any one Department, but by His Majesty's
Government, as the matter affected the disposition of the Imperial forces as a whole. The War Office do not contribute directly towards the cost of the cavalry regiment which it was decided to retain on the Indian establishment. They have agreed to pay £75,000 a year for two years to Indian revenues in consideration of various factors connected with the general scheme of reduction, of which the cost of the regiment in question was only one aspect. The last part of the question, therefore, does not arise.

Sir C. YATE: Is the hon. Gentleman not aware that the military forces in India have been reduced now below the margin of safety?

Mr. RICHARDS: I am not aware of that.

PUBLIC WELLS AND SCHOOLS.

Sir C. YATE: 45.
asked the Under-Secretary of State for India in which of the Provincial Legislative Councils resolutions have been passed permitting the use of public wells, schools, etc., by the backward and labouring classes of India; and which of the municipalities and local boards have given effect to this resolution?

Mr. RICHARDS: Resolutions to this effect were adopted last year in the Bombay and Central Provinces Legislative Councils. I have no information to enable me to answer the second part of the question.

Sir C. YATE: Cannot the hon. Gentleman give me one single instance in which this has been carried out?

Oral Answers to Questions — SUDAN.

EGYPTIAN TROOPS.

Lieut.-Commander KENWORTHY: 15.
asked the Secretary of State for Foreign Affairs what is the number of Egyptian troops stationed in the Sudan; whether the Egyptian Government is continuing to employ these troops in the Sudan; and what sum is accounted for in the Egyptian military expenditure on account of these troops?

The PRIME MINISTER (Mr. J. Ramsay MacDonald): The number of troops of the Egyptian Army stationed in
the Sudan is approximately 13,000. Of these, all except about 2,000 are recruited from natives of the Sudan. The Egyptian Government has not notified any intention of altering the present disposition of these troops. The Egyptian Government does not budget separately for that portion of its Army which is stationed in the Sudan, nor is the expenditure on that portion shown separately in the statement of accounts published after the accounts for the year are closed. At the beginning of the volume of published accounts, however, a special memorandum is included showing an amount which is described as "the military expenditure of the Sudan." It is understood that the figure thus shown is compiled by the Egyptian War Department, and is based to a great extent on estimates. It is supposed to represent the extra cost involved in maintaining troops in the Sudan as compared with what the cost of the same troops would be if stationed in Egypt. The latest statement of accounts which has been published is for the year 1st April, 1921, to 31st March, 1922. The figure given as the "military expenditure of the Sudan" for that year is £E.477,947.

ALLEGIANCE.

Lieut.-Commander KENWORTHY: 16.
asked the Secretary of State for Foreign Affairs what views have been expressed by the leading men and others of the inhabitants of the Sudan who have expressed views as to the future allegiance of the Sudan?

The PRIME MINISTER: The leading religious and secular notables of the Sudan have repeatedly made express statements of their loyalty to the present British Administration and of their desire for a continuance of British control in their country until such time as they may be in a position to manage their own affairs.

Oral Answers to Questions — DOMINION PASSPORT OFFICES(UNITED STATES).

Lieut.-Colonel HOWARD BURY: 17.
asked the Secretary of State for Foreign Affairs whether His Majesty's Government have agreed to the establishment of Dominion passport offices in the United States of America; and whether he can
give the names of the Dominions that are desirous of setting up passport offices of their own in the United State of America?

The PRIME MINISTER: The answer to the first part of the question is in the negative. An Irish Free State passport control office is, however, with the consent of His Majesty's Government, being set up in New York to deal with the very large number of foreign subjects applying for visas for the Irish Free State.

Lieut.-Colonel HOWARD-BURY: Can the right hon. Gentleman say how it will be possible to prevent any foreigners, desirable or undesirable, from obtaining visas in the Irish Passport Office, coming over to the Irish Free State, and then coming on into this country? Does not that mean setting up a passport office between the Irish Free State and this country?

The PRIME MINISTER: All that subject was thoroughly considered before this matter was fixed and the machinery put into operation.

Mr. BECKER: Will these passports be exactly the same as the passports issued by our Government, or will they be of a special character?

The PRIME MINISTER: There is no question of passports; it is a matter of visas.

Oral Answers to Questions — RUSSIA.

BRITISH EMBASSY PLATE, LENINGRAD.

Lieut.-Colonel HOWARD-BURY: 18.
asked the Secretary of State for Foreign Affairs whether he has any information as to the fate of the silver plate that formed part of the property of His Majesty's Government at the British Embassy at Leningrad; and whether, in the present negotiations with the Soviet Government representatives, a demand has been submitted for its restitution or for an adequate or equivalent compensation?

The PRIME MINISTER: His Majesty's Government are without definite information as to the fate of the silver plate of the British Embassy at Leningrad. This plate is included in the inventory of diplomatic property, the restitution of which forms part of the agenda of the present conference.

Lieut.-Colonel HOWARD-BURY: Will the right hon. Gentleman say whether this matter is being pressed before any money is given to the Soviet Government

Lieut.-Commander KENWORTHY: Is not this by far the most important question before the conference?

COMMERCIAL TREATY WITH PERSIA.

Mr. HANNON: 25.
asked the Secretary of State for Foreign Affairs whether he can make any statement as to the Commercial Treaty signed at Teheran between the Russian and Persian Governments?

The PRIME MINISTER: I have not yet received the text of the Russo-Persian Commercial Treaty recently signed at Teheran, and I am therefore not prepared to make any statement on the subject at present.

Oral Answers to Questions — H.M.S. "COCKCHAFER" (WAN HSIEN).

Mr. LANSBURY: 21.
asked the Secretary of State for Foreign Affairs whether he has received a communication from the Chinese Government protesting against the action of the commander of H.M.S. "Cockchafer" in threatening to bombard the town of Wan Hsien unless the municipal authorities ordered the execution of two junkmen, alleged to be the murderers of Mr. Hawley, and ordering the municipal authorities to walk in procession on the occasion of the funeral of Mr. Hawley; and will he, in order that the public may be in possession of all the facts connected with this incident, publish the Chinese despatch and the reply of the British Government?

The PRIME MINISTER: The answer to the first part of the question is in the affirmative. When the full report on the affair, which should be received in August from the Commander-in-Chief on the China station, arrives, I will consider the question of publication.

Oral Answers to Questions — INTERNATIONAL QUESTIONS(WHITE PAPER).

Mr. AYLES: 23.
asked the Secretary of State for Foreign Affairs whether he has
now obtained the information on the treatment of international questions by Parliament in European countries from His Majesty's diplomatic representatives abroad enabling him to bring the information contained in the White Paper, Miscellaneous, No. 5, 1912 [Cd. 6102], up to date; and, if so, whether he will circulate it to the Members of the House?

The PRIME MINISTER: The reports are in course of collection, and I should be sorry to publish until they have all been received. I will endeavour to have them ready for hon. Members at the beginning of the Autumn Session.

Oral Answers to Questions — CONSTANTINOPLE (GALATA BRIDGE TOLLS).

Sir FREDRIC WISE: 24.
asked the Secretary of State for Foreign Affairs whether the Municipality of Constantinople has again seized the revenues from the Galata Bridge tolls, which form the security for the Constantinople Loan of 1909?

The PRIME MINISTER: I have no information on this subject beyond that which has appeared in the Press.

Oral Answers to Questions — LEAGUE OF NATIONS.

ARMENIAN WOMEN AND CHILDREN.

Mr. EDMUND HARVEY: 26.
asked the Secretary of State for Foreign Affairs whether he will take steps at an early date to bring before the appropriate committee of the League of Nations the position of Armenian women and children in Asia Minor who have been abducted from their families and are being retained in Turkish harems; and whether the British representatives on the League of Nations will be instructed to support the continuance of the rescue work carried on from Aleppo during 1923 and in the present year under the auspices of the League, which is in danger of being discontinued through lack of funds?

The PRIME MINISTER: I regret that I cannot add anything to the reply which was given to the hon. Member for North Hackney (Mr. John Harris) on the 30th June. I understand, however, that for some years it has proved impossible, in
view of Turkish opposition, to continue any active rescue work of this nature in Turkey, and that the work carried on by the representatives of the League in Aleppo in 1923 was almost entirely restricted to the care of those women and children who had already been rescued, and to the relief of recent fugitives and refugees. His Majesty's Government would be only too glad to do anything of the least practical value.

Mr. HARVEY: Can financial help be given to the League towards the completion of this work of rescue?

The PRIME MINISTER: I understand that is a matter for the League itself. There is a difficulty in giving financial help. If the hon. Member can make any fresh representations raising new points, I shall he very glad to consider them.

BRITISH REPRESENTATIVES (INSTRUCTIONS).

Sir WALTER de FRECE: 40.
asked the Prime Minister whether he proposes to lay before Parliament before the Recess the instructions to he given to the British representatives at the autumn meeting of the Assembly of the League of Nations?

The PRIME MINISTER: I doubt whether the suggestion is desirable, but in any ease it would be impossible to lay anything before September since in most cases the instructions cannot be prepared until very shortly before the Assembly meets.

Oral Answers to Questions — GREAT WESTERN RAILWAY COMPANY OF BRAZIL.

Mr. A. M. SAMUEL: 27.
asked the Under-Secretary of State for Foreign Affairs if he will request the Brazilian Government to give the reason for the default, since 1920, on its contractual obligations towards the Great Western Railway Company of Brazil, in which £4,500,000 of British capital is embarked; and will he ascertain from the Brazilian Government whether it is contemplating an application to British investors for a loan within the immediate future?

The PRIME MINISTER: The Brazilian Government refused to carry out their undertaking to allow the Great Western Railway Company of Brazil to raise its tariffs owing to the apposition which the
proposal had aroused in the districts affected. The Brazilian Government have been endeavouring for some time past to obtain a loan in this country or elsewhere. His Majesty's Ambassador at Rio de Janeiro has recently pressed the Brazilian Government to carry out their agreement with the Great Western Railway Company of Brazil.

Mr. SAMUEL: I beg to give notice that, should I be so fortunate as to catch the Chairman's eye this afternoon, I shall raise this question on the Foreign Office Vote.

Oral Answers to Questions — GOVERNMENT PRINTING CONTRACTS.

Sir KINGSLEY WOOD: 28.
asked the Prime Minister if he has ascertained whether the Departmental Committee at present inquiring into the question of State printing propose to investigate the facts recently disclosed in the Law Courts of the payment by one Government contractor to another for the purpose of preventing competition in regard to certain Government contracts; and whether, in such event, he can state how they propose to deal with the matter?

The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham): I understand that the Committee are proposing to make such further inquiries as are open to them in regard to the contracts in question and the similar contracts now running, but it will, of course, be understood that the Committee have no power to subpœna witnesses or to take evidence on oath.

Sir K. WOOD: Does not the hon. Gentleman think this a very unsatisfactory tribunal for investigating a grave matter of this character, and will he consider the question of setting up a Committee which will have power to call for documents and to examine witnesses on oath?

Mr. GRAHAM: It may, as the hon. Gentleman suggests, not be satisfactory, but at the moment it would be difficult to do other than allow the Committee to make the investigation. Let us get that, and I will undertake to make further inquiry, in order to find out what additional steps should be taken.

Mr. STURROCK: When shall we have the Report of the Committee that is sitting at present?

Mr. GRAHAM: I could not give a date for that, because I am afraid that this additional duty may entail delay.

Oral Answers to Questions — REPARATIONS (INTER-ALLIED CONFERENCE).

Mr. J. HARRIS: 31.
asked the Prime Minister whether, during the discussion in Paris, any suggestion was made that the principal proceedings of the Inter-Allied Conference should, like those of the Council of the League of Nations, be held publicly in order to mark a definite break in the old practice of secret diplomacy?

The PRIME MINISTER: No such discussion took place at Paris. Press arrangements will have to be the subject of an agreement between the representatives at the Conference.

Mr. HARRIS: Is it the right hon. Gentleman's intention to endeavour to get this Conference arranged on the basis of open diplomacy, which has proved such a success at Geneva?

The PRIME MINISTER: On the basis of open diplomacy, certainly—not open diplomacy used in a sort of parrot-cry way, but as a real, substantial contribution to informing the public accurately.

Mr. HARRIS: I do not mean in any parrot-cry form. Is the right hon. Gentleman not aware of the great success which has attended the open diplomacy of the Council of the League—a system which, after all, owes its initiative to our friends opposite, and may I hope he will follow on along those lines?

Mr. ORMSBY-GORE: 38.
asked the Prime Minister what arrangements have been come to regarding the representation of the Dominions at the forthcoming Inter-Allied Conference in London?

The PRIME MINISTER: I am still in communication with the Dominion Governments on the matter.

Mr. ORMSBY-GORE: Will a statement be made either to-morrow or before the Conference meets so that the Conference
should not meet without the public in the Dominions knowing exactly what arrangements have been made?

The PRIME MINISTER: The matter is still under consideration. We are in communication with the Dominions, and as soon as it is arranged an announcement will be made.

Oral Answers to Questions — BLIND PERSONS BILL.

Mr. PALMER: 34.
asked the Prime Minister if the Government are prepared to give facilities for the Blind Persons Bill?

The PRIME MINISTER: I would refer my hon. Friend to the answer given by the Lord Privy Seal on the 19th June last in reply to a question by my hon. Friend the Member for Tradeston.

Oral Answers to Questions — IRISH FREE STATE.

PASSPORTS.

Sir JOHN PENNEFATHER: 36.
asked the Prime Minister whether the Government have consented to the establishment by, the Irish Free State of passport offices in any foreign country; if so, whether all persons entering the Free State on such passports will be given free access to Great Britain and Northern Ireland; and whether passports issued by British embassies abroad will be valid in the Free State?

The PRIME MINISTER: The answer to the first part of the question is in the negative, and the second part does not, therefore, arise. The answer to the third part of the question is in the affirmative.

LAND PURCHASE (LOAN GUARANTEE).

Mr. ORMSBY-GORE: 37.
asked the Prime Minister when it is proposed to take the Financial Resolution on the guarantee of the Irish Free State land stock; and whether he will give an assurance that the matter will be dealt with before the House rises in August?

The PRIME MINISTER: The Government realise the importance of this matter; but it is not possible at the moment to give a definite undertaking that time will be found for the consideration of this Resolution before the Recess.

Lieut.-Colonel HOWARD-BURY: Did not the Lord Privy Seal, in an answer to a supplementary question the other day, say he would find time before the Recess?

The PRIME MINISTER: I should not like to pledge myself, but my impression is that he said he hoped to find time. I am sure he guarded himself, because I know perfectly well that at the time there was some doubt whether an opportunity could be found.

Mr. ORMSBY-GORE: Is it not a fact that representations have been made by the Irish Free State Government that the completion of land purchase, urgently required in the West of Ireland, is being held up pending the final decision of His Majesty's Government in regard to the ratification of the guarantee?

The PRIME MINISTER: I have no information which would justify the statement that purchase is being held up, but I can give an unqualified assurance that this is going to be done.

MALICIOUS INJURY DECREES.

Lieut.-Colonel HOWARD-BURY: 47.
asked the Secretary of State for the Colonies whether he is aware that compensation decrees, given in October, 1921, by His Majesty's Judges for compensation for criminal injury to property in Ireland, which occurred in May, 1921, have proved in certain cases to be valueless under the Free State Government; and whether His Majesty's Government will afford some kind of compensation by an ex gratia payment in such cases?

The SECRETARY of STATE for the COLONIES (Mr. Thomas): As the House is aware, all decrees awarded in undefended cases under the Malicious and Criminal Injuries Acts in respect of injuries to property prior to 11th July, 1921, are subject to review by the Compensation (Ireland) Commission, which was appointed jointly by His Majesty's Government and by the Government of the Irish Free State. I understand that in some cases the Commission has decided that the injury in respect of which the Court, in the absence of any defence, had awarded compensation was not in, fact a malicious and criminal injury within the meaning of those Acts. I regret that His Majesty's
Government could not undertake to supplement the awards of the Commission in such cases.

Lieut.-Colonel HOWARD-BURY: Is the right hon. Gentleman aware that decrees were awarded in October, 1921; and are they to be regarded as absolutely valueless—decrees given by His Majesty's Judges?

Mr. THOMAS: If the hon. and gallant Member will put down that question, I will give him a definite answer on the point.

Oral Answers to Questions — SITTINGS OF PARLIAMENT.

Sir W. de FRECE: 39.
asked the Prime Minister whether the Government proposes to take any action on the Report of the Joint Committee on. the Sittings of Parliament; and, if so, what?

The PRIME MINISTER: This Report was only circulated on Saturday, and the Government have not yet had an opportunity of considering it.

Oral Answers to Questions — FORTY-EIGHT HOURS WEEK.

Mr. D. G. SOMERVILLE: 42.
asked the Prime Minister whether the Government intend to pass the Bill providing for a 48–hours week; whether any of the trades affected are, as a prior step, to be consulted as to its effect on their work and livelihood; and whether any of them have expressed any opinion and, if so, what that opinion is?

The PRIME MINISTER: It is the hope of the Government that the Bill to limit the hours of work in industrial undertakings, which my right hon. Friend the Minister of Labour proposes to introduce to-day, will be passed into law. He has discussed the proposals with organisations representative of employers and employed, and the views of the various interests concerned will, no doubt, be adequately considered in the Debates on the Bill.

Mr. W. THORNE: Is the 48–houre proposal going to be confined within the six days or seven?

The PRIME MINISTER: Perhaps my hon. Friend will wait till the Bill is before him.

Mr. SOMERVILLE: Is it not a fact that the railway workers have turned it down?

The PRIME MINISTER: That question had better be put to the Minister of Labour.

Oral Answers to Questions — HONOURS.

Mr. T. JOHNSTON: 44.
asked the Prime Minister whether he is prepared to set up a commission, with powers to call for papers, and to take evidence on oath, to inquire into the circumstances in which it has been the practice in recent years to make recommendations for honours

The PRIME MINISTER: The recommendations of the Royal Commission on Honours made in 1922 are now in operation, and thus far have apparently worked with satisfaction.

Mr. JOHNSTON: Has the right hon. Gentleman's attention been called to a statement made by the trustees of the estate of the last Sir John Stewart that in December, 1920, a sum of £50,000 was paid—

Mr. SPEAKER: I rather think this is very like a question which I disallowed.

Major the Marquess of TITCHFIELD: How many members of the right hon. Gentleman's own party since last autumn have applied for titles?

Oral Answers to Questions — GOLD COAST (TAKORADI HARBOUR).

Mr. ORMSBY-GORE: 46.
asked the Secretary of State for the Colonies whether Messrs. Stewart and MacDonnell, the consulting engineers of the Gold Coast Government for Takoradi Harbour, will have an opportunity of submitting, together with Mr. Palmer's Report, their replies to any criticisms contained in that Report before Mr. Palmer's Report is laid upon the Table of the House?

Mr. THOMAS: Messrs. Stewart and MacDonnell have sent in their resignation, and I have accepted it on the ground that the Agreement with them has proved unworkable. I understand that they will submit a reply to the criticisms on their work in Mr. Palmer's Report, and until I receive that reply I do not propose to make any statement.

Mr. ORMSBY-GORE: Can the right hon. Gentleman make a statement, now that the resignation has been received, as to whether the work is going to be entirely cancelled, or whether somebody else will carry on?

Mr. THOMAS: I have already cancelled the work, and I am now considering fresh means of continuing it.

Mr. BECKER: If it is found that money has been wasted on this project by these contractors, will the Government be able to recover any of it from them?

Mr. THOMAS: The hon. Member bad better put that question to some of those responsible for the undertaking.

Mr. J. HARRIS: Are Messrs. Stewart and MacDonnell refunding any of the £70,000 fee which they received?

Mr. THOMAS: I think it would be better to wait until I make a statement on the whole question. I have accepted the resignation, and have given an opportunity to this firm to express their views, on the criticism of their work, and it would be unfair for me to express an opinion now.

Mr. HARRIS: Shall we have Mr. Palmer's Report before the Colonial Office Vote is taken?

Oral Answers to Questions — IRAQ.

ANGLO-IRAQ TREATY.

Lieut.-Commander KENWORTHY: 48.
asked the Secretary of State for the Colonies how many deputies there are in the Iraq Constituent Assembly; how many of these deputies voted for the ratification of the Anglo-Iraq Treaty; whether a rider was added to the Treaty with reference to Mosul; what were its terms; and when it is proposed to bring the Treaty before Parliament for discussion?

Mr. THOMAS: The number of deputies elected to the Constituent Assembly was 110. Sixty-nine deputies were present when the Vote on the Treaty was taken: 36 voted for acceptance, while nine abstained from voting. The Assembly attached a rider in the following terms to its acceptance of the Treaty:
This treaty and its subsidiary agreements shall become null and void if the British Government fail to safeguard the rights of Iraq in the Mosul vilayet in their entirety.
With regard to the last part of the question, I hope shortly to be able to give a date.

Lieut. - Commander KENWORTHY: Can the right hon. Gentleman say why so few deputies were present during a discussion of this important matter?

Mr. THOMAS: I was not there.

Lieut. - Commander KENWORTHY: Surely the right hon. Gentleman is seised of the facts, and that it is very important to have a substantial minority present.

Lieut.-Colonel T. WILLIAMS: Is there any truth in the rumour that the opposition were locked out?

Mr. THOMAS: If they were, it was not by instruction from this side. As regards the first supplementary question, of course, I am seised of the facts. There are very important questions discussed in this House when few Members are present. It is impossible to give an explanation.

GARRISON.

Mr. BECKER: 60.
asked the Secretary of State for the Colonies if he can give any information to the House regarding our military situation in Iraq; and has any evacuation yet taken place during the last 12 months?

Mr. THOMAS: It would be contrary to public policy to give particulars of the Iraq garrison.

Mr. BECKER: Does that mean that nothing is happening?

Mr. THOMAS: No, it means that we ought not to put questions and expect answers to questions such as this.

Mr. BECKER: Do the Government intend to stay in Iraq indefinitely?

Oral Answers to Questions — FOOD PRICES.

Mr. T. JOHNSTON: 49.
asked the Secretary of State for the Colonies whether, in preparing the business for discussion at the Empire Economic Conference, he will take into consideration
the fact that during the past month there has been a continued rise in the price of wheat and flour, causing an advance in some districts of the country on the price of bread; that maize is also advancing in price, which will have an effect upon the cost of milk and beef; that European wheat is estimated at 20,000,000 cwts. less in 1924 than in 1923; and what steps he proposes to take to ensure, through the Empire Economic Committee or otherwise, an adequate supply of food at reasonable prices for the British people?

Mr. THOMAS: His Majesty's Government had not contemplated that an Empire Economic Conference would be held this year, and the question of the establishment of an Economic Committee is still under discussion with the Dominion Governments. I am, however, having inquiries made into the facts to which my hon. Friend calls attention.

Mr. D. G. SOMERVILLE: Is it not a fact that these very serious increases in the cost of living have taken place since the Labour Government came into power?

Mr. THOMAS: I am aware that all manner of attempts are made to exploit the Labour Government. If this be another, I must accept it from my hon. Friend.

Oral Answers to Questions — BRITISH EMPIRE (WAGES AND LABOUR CONDITIONS).

Mr. AYLES: 51 and 52.
asked the Secretary of State for the Colonies (1) whether he can see his way to have a Return prepared showing the existing rates of pay and hours worked in all parts of the British Empire, together with the unemployment Returns for the past three years;
(2) the methods adopted in the various parts of the British Empire for the recruitment of labour, the, settlement of labour disputes, and the adjustment of wages and conditions of labour; and whether, if the information is not now available in his Department, he will obtain the same and circulate it to Members of the House?

Mr. THOMAS: I am not quite clear whether my hon. Friend refers to the self-governing Dominions as well as to those parts of the Empire for the administration of which I am responsible. If the
self-governing Dominions are referred to, I fear that I would hardly ask the Governments concerned to furnish a special return of the very comprehensive nature indicated, but I would invite the attention of my hon. Friend to the Official Year Books, in which a good deal of the information desired is published. As regards the Colonies not possessing responsible Government, Protectorates, etc., conditions are so various, and the degree of industrial development reached in each territory differs to so great an extent, that it would hardly be practicable to prepare a comprehensive return. There is some information as regards rates of pay in certain employments, but no records of unemployment are available. If the hon. Member will communicate with me with regard to the particular points which he desires to bring out I shall be happy to see whether the information at my disposal would enable me to assist him.

Mr. AYLES: Does not the right hon. Gentleman realise that if we are going to get rid of or find a solution for all the problems of Empire, in order that we may get a really consolidated Empire, we must have all the facts concerning the economic side as well as those bearing on the general economic activities of various parts of the Empire, and instead of—[HON. MEMBERS: "Speech!"]

Oral Answers to Questions — KENYA.

LAND RESERVATION.

Mr. SCURR: 53.
asked the Secretary of State for the Colonies whether land occupied by or reserved for Native tribes in Kenya is Crown land which the Government have the right to dispose of as they think fit under the Law of 1915 without consideration for Native systems of occupancy and ownership?

Mr. THOMAS: The position in law is as stated in the question. The Governor has informed me that an Ordinance is being prepared which will provide for a Board of Trustees to administer Native lands; but in any case no land can be alienated from a Reserve for any purpose without the prior approval of the Secretary of State.

Mr. SCURR: 54.
asked the Secretary of State for the Colonies what is the total extent of the land area in Kenya set apart
for white settlers; and how much of such area has been brought under cultivation?

Mr. THOMAS: No region is definitely set apart for white settlers, but the area available for white settlement is estimated at 7,000,000 acres, of which 4,500,000 have been allotted. 3,985,000 acres are in occupation. It is estimated that 274,319 acres are under cultivation, while the numbers of cattle, sheep, etc., in the possession of Europeans, represent an additional area of 1,600,800 acres, or about 1,875,000 acres in all.

Mr. J. HARRIS: 62.
asked the Secretary of State for the Colonies whether the Northern Frontier District of Kenya has hitherto been regarded as a Native reserve; whether it is still regarded as secure from alienation to immigrants; and whether in an individual or a collective capacity?

Mr. THOMAS: The Northern Frontier District is not technically a Native reserve, but conditions there are such that alienation, if justifiable, is hardly practicable. I will bring the hon. Member's question to the notice of the Governor.

NATIVE-GROWN CROPS.

Mr. W. M. ADAMSON: 56.
asked the Secretary of State for the Colonies what steps have been taken by the Government of Kenya to encourage the production of native-grown crops on the reserves set apart for the native tribes; and what action has been taken on the objection put forward by white settlers that such action would interfere with them obtaining an adequate supply of labour?

Mr. THOMAS: The principal steps taken and now being taken are the appointment of European supervisors the training of native instructors and agricultural apprentices and the establishment of a training school; the provision of cotton seed, improved maize seed, rice, etc., the preparation of land for crops and the planting of demonstration fields of maize; the issue of vernacular handbooks on the management of various crops; the holding of agricultural shows within the reserves; and the inception of railway schemes for opening up the principal reserves. With regard to the latter part of the question, no action is contemplated. It may be
expected That there will always be many natives who will prefer to leave the reserves for employment elsewhere.

Mr. BLUNDELL: Will the right hon. Gentleman consider taking similar steps to encourage native-grown crops in this country?

LIQUOR LAWS (SOMALIS).

Mr. J. HARRIS: 63.
asked the Secretary of State for the Colonies whether he is aware that by a recent judgment in Kenya Colony it has been decided that immigrant Somalis do not come under the local liquor laws which prohibit sale to natives; and whether he proposes to take any action in the matter?

Mr. THOMAS: From the reference to this judgment which I have seen in the local Press, a legal question of some complication appears to be involved. I shall consult the Governor as to the position.

Mr. HARRIS: Does not this show that it is quite an impossible task to institute racial distinctions in prohibition territory?

Oral Answers to Questions — BRITISH GUIANA (LEGISLATIVE ASSEMBLY).

Mr. SCURR: 55.
asked the Secretary of State for the Colonies the numbers, respectively, of the white, Indian, and African members elected to the Legislative Assembly of British Guiana; and whether any Indians or Africans are members of the Governor's Executive Council?

Mr. THOMAS: I have not the information available which would enable me to answer this question, and, in any case, I deprecate any attempt to classify the peoples of British Guiana on racial lines.

Mr. ORMSBY-GORE: Is the right hon. Gentleman aware that in the British Guiana Combined Court such differentiation is never made, and such racial differentiation is quite unknown in the West Indies?

Mr. THOMAS: That is why I said I deprecated it.

Oral Answers to Questions — EAST AFRICAN COMMITTEE.

Mr. ROBERT RICHARDSON: 57.
asked the Secretary of State for the Colonies
whether, in view of the extensive interests of Indians in East Africa, he proposes to appoint a representative Indian on the East African Committee?

Mr. THOMAS: No, Sir. The membership of the Committee has not been decided on any basis of representation of local interests. I have no doubt that the Committee will have ample opportunity of ascertaining the views of Indians on matters within the terms of reference.

Oral Answers to Questions — JAPANESE CONSUL (MOMBASSA).

Mr. BATEY: 58.
asked the Secretary of State for the Colonies whether he is aware that the Japanese Consul for Africa was refused hotel accommodation at Mombassa on the occasion of his tour in East Africa; and if he will inquire into the circumstances of such refusal?

Mr. THOMAS: I have no information of the incident, but I will make inquiries.

Oral Answers to Questions — PALESTINE (HYDRO-ELECTRICAL POWER).

Mr. BECKER: 59.
asked the Secretary of State for the Colonies the amount of horse-power which is being developed on the River Jordan in Palestine; are oil engines still being used7/20/2007; and what is the total amount of horse-power which it is proposed to develop under the Rutenburg concession?

Mr. THOMAS: As the reply is rather long and contains many figures, I purpose circulating it in the OFFICIAL REPORT.
Following is the answer:
As the hon. Member has already been informed, no electricity is being developed by water-power in Palestine at present. The Jaffa Electrical Company have installed oil engines developing 1,000 horsepower, to be increased shortly to 1,250 horse-power. The Palestine Electric Corporation are installing oil engines developing 1,200 horse-power at Haifa. The Jordan scheme comprises the construction, in succession, as the demand for electricity increases, of three waterpower stations developing 24,000, 24,000 and 50,000 horse-power respectively. The ultimate maximum amount of power which can be generated hydro-electrically in
Palestine is estimated very roughly at 200,000 horse-power. The Jordan concession is not yet in force.

Oral Answers to Questions — BRITISH EMPIRE EXHIBITION

DOMINION REPRESENTATIVES.

Mr. LAMB: 61.
asked the Secretary of State for the Colonies if he is aware of the desire expressed by the representatives of the Dominions and Colonies now in charge of the various sections at the British Empire Exhibition that facilities should be arranged to enable them to meet and confer with the object of promoting and encouraging interchange of natural products by trade between the countries comprising the British Empire; and if he is prepared to take steps to provide such facilities?

Mr. THOMAS: I have heard of the suggestion referred to by the hon. Member, with which I agree, and I am having inquiries made.

CROWN COLONIES (EXPORT TRADE).

Mr. D. G. SOMERVILLE: 64.
asked the Secretary of State for the Colonies whether the Crown Colonies have, as a result of their participation in the British Empire Exhibition, recorded as yet any indication of positive increase in their export trade; and, if so, in what direction?

Mr. THOMAS: It is too early to expect definite indications of the kind suggested, but from all the information in my possession I have the strongest reason to believe that a large increase may be counted upon.

ADMISSIONS (MAY AND JUNE).

Mr. TINKER: 66.
asked the Parliamentary Secretary to the Overseas Trade Department if he will state the number of persons who have paid for admission to the British Empire Exhibition at Wembley during the months of May and June, respectively?

Mr. LUNN (Secretary, Overseas Trade Department): I am informed by the British Empire Exhibition authorities that 1,421,343 persons paid for admission to the Exhibition during the month of May, and 3,080,356 during the month of June.

Mr. TINKER: Is the right hon. Gentleman aware of the inconvenience caused by the lack of hotel accommodation?

Mr. SPEAKER: The right hon. Gentleman is not responsible for hotels.

CATERING.

Mr. JAMES STUART: 67.
asked the Parliamentary Secretary to the Overseas. Trade Department whether he is aware that dissatisfaction exists in Colonial circles in connection with the British Empire Exhibition, owing to the refusal of the catering contractors to provide facilities for corporate luncheons and dinners at the exhibition except at the Lucullus, where the price is prohibitive to the majority of visitors, and that, again, with this one exception, the caterers have recently issued an edict forbidding all reservation of tables at the exhibition; and whether representations can be made to the exhibition authorities with a view to securing that, in return for their monopoly, the caterers should show greater consideration for the comfort and convenience of their customers?

Mr. LUNN: I have not received any complaints regarding the facilities for such luncheons and dinners at the British Empire Exhibition as the hon. Member has in mind. With regard to the reservation of tables, I am informed by the British Empire Exhibition authorities that the caterers are prepared to reserve tables at the Lucullus at all times, and at the Grand Restaurant until 12.30 for luncheon and 7.0 p.m. for dinner. The caterers consider that, in view of the numbers of visitors to the exhibition, it would be undesirable at other hours to reserve accommodation for those who wish to order tables in advance, when it is only with the greatest difficulty that they are able to meet the immediate demands of those who are waiting for admission to the restaurants.

Mr. BECKER: Is it not a fact that trade union delegates had great difficulty in getting tables booked at this restaurant?

Sir E. HUME-WILLIAMS: 71.
asked the Parliamentary Secretary to the Overseas Trade Department what share of the profits made by Messrs. Lyons in the exercise of their catering monopoly at the British Empire Exhibition goes to
the management of the exhibition; and what sums, if any, have to date been received in respect of such profits?

Mr. LUNN: I understand from the exhibition authorities that the receipts from Messrs. Lyons under their concession are calculated upon graduated percentages of their gross takings and not upon profits. As regards the rest of the question, I am advised that it is not desirable at the present stage to give detailed information in regard to the terms of concessions and as to the receipts from them.

Mr. HARMSWORTH: Will the hon. Gentleman, at the termination of the exhibition, be able to make a statement of the profits made by Messrs. Lyons at the exhibition and the amount paid by them for the catering?

Mr. LUNN: I think that it will be possible perhaps to make a statement at that time regarding what has gone to the exhibition authorities from Messrs. Lyons' contract.

Major COLFOX: Will the hon. Gentleman at the same time make a statement of the profits which have been made by Messrs. McAlpine?

Mr. LUNN: I did not say that I would make any statement with regard to profits.

Sir E. HUME-WILLIAMS: Seeing that the firm in question made a profit of £700,000 last year, after paying debenture interest, will the hon. Gentleman take steps to secure that some part of this sum shall go to the exhibition authorities?

Mr. LUNN: I do not suppose that Messrs. Lyons, in the £700,000 which they made last year, made anything out of the exhibition at that time, and so that does not enter into the question.

Mr. P. HARRIS: What is the reason for having any mystery as to the terms of the concession? Why not have them made known to the House?

Mr. LUNN: I do not see any objection to a statement being made to the House at the proper time.

Sir E. HUME-WILLIAMS: 72.
asked the Parliamentary Secretary to the Overseas Department whether his attention
has been called to the fact that at the Lucullus Restaurant belonging to Messrs. Lyons at the British Empire Exhibition, where a minimum sum of 25s. is charged for each dinner, no intimation of that fact is given to a diner, either in the menu or elsewhere, until he discovers it for himself in his bill; and whether he will arrange with the management that in future the price of this dinner shall be conveyed to the intending diner before he has eaten it as well as after?

Mr. LUNN: My attention had not previously been drawn to the facts to which the hon. and learned Member refers, and I am forwarding his suggestion, for which I am much obliged, to the exhibition authorities.

Mr. THURTLE: Will my hon. Friend arrange for a detachment of First Aid men to be present at this restaurant when these people get, their bills?

WAGES.

Sir E. HUME-WILLIAMS: 70.
asked whether the Committee which has been promised with the object of inquiring into the wages paid at the British Empire Exhibition has been set up; and, if so, of whom it is composed, and what Report, if any, they have made with reference to the complaint by Messrs. Lyons and Company's waitresses that they are underpaid?

Mr. LUNN: As I stated, in reply to the hon. and learned Member on the 4th June, my efforts to secure the constitution of a Works Council at the British Empire Exhibition have not been successful. The latter part of the question, therefore, does not arise.

EMPIRE PAGEANT.

Sir HARRY BRITTAIN: 73.
asked the Parliamentary Secretary to the Overseas Trade Department whether, in view of the great Imperial and educational value of the British Empire pageant, he has considered the importance of facilitating in every way the attendance of as large a number of the public as possible at the pageant, whether these considerations have been borne in mind in fixing the charges which are to be made for seats; and whether he can arrange for a proportion of the accommodation to be available free of any charge?

Mr. LUNN: Yes, Sir. I am glad to be able to say that, with the concurrence of the Board of Management of the British Empire Exhibition, and with the consent of the Treasury, arrangements have been made to throw open at the performances of the Pageant of Empire, free of any charge to the public, very nearly half of the total accommodation which will be available in the Stadium. This means that there will be free seats for 10,000 spectators and free standing room for another 9,000. For the other seats there will be reservation charges of 1s. for 16,000 covered seats; 2s. for approximately 2,800 seats immediately behind the Royal Enclosure; and 4s. for 3,000 seats on each side of the Royal Enclosure. These prices all include Entertainment Tax. The Government have come to this decision in spite of the sacrifice of revenue involved, because they realise that the pageant will be, not merely a magnificent spectacle, but also an educational instrument of the highest value; and they desire to give all classes of the community, and especially children, every reasonable facility for witnessing it.

Mr. PALMER: May I ask the hon. Gentleman what sacrifice of revenue is called for by this proposal?

Mr. LUNN: If my hon. Friend will put that question on the Paper, I will answer him.

Sir H. BRITTAIN: In congratulating the hon. Gentleman on his decision, may I ask him whether he will give that decision immediate and the widest possible publicity?

SCHOOL CHILDREN.

Sir H. BRITTAIN: 74.
asked the Parliamentary Secretary to the Overseas Trade Department what is the number of school children who, up to date, have visited the British Empire Exhibition; what is, approximately, the total number expected during the course of the exhibition; and whether all arrangements in connection with housing and general comfort are being carried out to his full satisfaction?

Mr. LUNN: I am unable to give the exact number of school children who have visited the British Empire Exhibition in organised parties to date under the scheme elaborated by a special Committee which I appointed with the
approval of my right hon. Friend the President of the Board of Education for the purpose of encouraging visits to the exhibition by organised parties of children, so that full advantage might be taken of its educational possibilities. The total cannot, however, have been less than at the rate of 150,000 a week since the 1st May, and it is anticipated that this rate will be maintained until the end of July, when the summer holidays begin. By that time it is estimated that at least 2,000,000 children will have been to Wembley. With regard to the last part of the question, I may say that I have taken the opportunity of seeing for myself the hostel at Park Royal, where children coming from the provinces may spend the night at a maximum charge of 5s. per head, which includes three meals, and where some 40,000 have already been accommodated. I am able to assert that the arrangements for their housing and general comfort, which are under the supervision of the Middlesex Education Committee, are excellent.

Mr. STURROCK: May I ask whether this is the House of Commons or the National Advertising Convention?

Oral Answers to Questions — COMMUNIST PROPAGANDA, SOUTH AFRICA.

Mr. D. G. SOMERVILLE: 65.
asked the Secretary of State for the Colonies if he has received any report as to the plans outlined at the recent Communist Internationale in Moscow for the purpose of stirring up disaffection among the coloured races in South Africa; whether this has been transmitted to the South African authorities; and whether, in view of previous attempts of the same kind, he will inquire further into the matter?

Mr. THOMAS: I have seen a report in the Press of the alleged intentions of the Communist Internationale in this matter, but would point out that the same body has made desperate efforts in this country, and failed. I am quite satisfied the South African Government is capable of dealing with the situation.

Mr. SOMERVILLE: Is the right hon. Gentleman perfectly satisfied that the Communist conspiracy in this country has failed?

Mr. MILLS: There are only four of them.

Oral Answers to Questions — WOOLLEN TRADE (EXPORTS TO HUNGARY

Sir GEOFFREY BUTLER: 69.
asked the Parliamentary Secretary to the Overseas Trade Department whether he is aware that difficulty is being experienced by British firms in getting licences to export woollen goods into Hungary to such an extent that they are unable to carry out the orders which they are receiving from that country; and whether he sees any prospect of the abolition of the Hungarian import licensing system, or whether His Majesty's Government can take any further steps conducive to that end?

Mr. LUNN: I have received complaints from British firms as regards the effect of the Hungarian import restrictions on the trade in woollen goods. As indicated in my reply to the hon. Member's question of 12th May last, continuing efforts are being made to remove the difficulties in the way of our export trade to Hungary, but I fear they cannot be entirely eliminated until the system of import restrictions is abolished. This step is in contemplation, and I hope that it may be taken as soon as those responsible for Hungary's finances consider that this can be done with safety.

Oral Answers to Questions — GOATS (IMPORTATION).

Lord APSLEY: 75.
asked the Minister of Agriculture if he is aware that Dr. Edith Leonard, of 69, Bedford Place, Southampton, is desirous of bringing back from Madeira, whither she went with the intention of practising her profession, her pet she-goat, which she took with her, and that the authorities now refuse to permit her pet goat to come back at all, although it is a British goat, and the owner is very much attached to it; seeing that goats have been recently brought from Africa for the British Empire Exhibition, and that the British Goats Society were last year permitted to import a few goats into this country, what is the objection to Dr. Leonard's goat being brought back under proper quarantine regulations; and whether he will look sympathetically into the whole matter?

The MINISTER of AGRICULTURE (Mr. Buxton): I am aware of the matter to which the Noble Lord refers. While I sympathise with the natural desire of
Dr. Leonard to retain her pet, I regret that I cannot see my way to authorise the importation of any goats from Madeira, as the information available with regard to the regulation of livestock there is not sufficient to satisfy me that there is no risk of infection. For his further information I am sending the Noble Lord particulars of the only conditions on which importation of animals is allowed.

Lord APSLEY: Is the right hon. Gentleman aware that whereas the Government Regulations so far have not succeeded in excluding foot-and-mouth disease from this country, in this particular case this unfortunate lady has had long association with her pet, that it has a clean bill of health, and why it is that always the unfortunate and blameless individual has to suffer under Government Regulations?

Mr. BECKER: As this lady will be separated from her pet, may I ask who has got her goat?

Oral Answers to Questions — AGRICULTURE.

HOPS.

Mr. HANNON: 76.
asked the Minister of Agriculture whether he can state the number of acres in the United Kingdom under hops; the total estimated produce; the yield per acre; the average season price; and the quantities of hops imported and exported during the year 1923?

Mr. BUXTON: The acreage under hops in England in 1993; was 24,893 acres, the estimated total production was 229,000 cwts., and the estimated yield per acre 9˙2 cwts. Hops are not grown in any other part of the United Kingdom. All hops grown in this country in 1923 were taken into control at an average price of £13 per cwt. The quantity of hops imported into the United Kingdom in 1923 was 13,442 cwts. and the quantity exported from the United Kingdom, including re-exports of imported hops, was 23,382 cwts. I should add that from 1st April, 1923, the statistics of imports, and exports include the trade of Great Britain and Northern Ireland with the Irish Free State, and exclude the direct foreign trade of the Irish Free State.

Mr. W. THORNE: Are the hops in question used for feeding goats?

FARM SETTLEMENT ACCOUNTS.

Sir F. WISE: 77.
asked the Minister of Agriculture if he will state the total profit or loss on the Farm Settlement Accounts in England and Wales for 1923–24?

Mr. BUXTON: The accounts of the farm settlements in England and Wales for 1923–24 are not yet completed, and the total profit or loss for that year cannot, therefore, at present be stated.

Oral Answers to Questions — HOUSING.

EVICTION PROCEEDINGS, ELTHAM.

Sir K. WOOD: 78.
asked the First Commissioner of Works whether he proposes to proceed to the eviction of Mr. George Frederick Beer and his wife and children from 13, Mercury Road, Eltham?

The FIRST COMMISSIONER of WORKS (Mr. Jowett): All that my Department has asked for in this case is the right to resume possession of property for which the rent is not being paid, although the tenant receives more than half of it from a sub-tenant. There are also considerable arrears. Before giving his decision the Judge will take into consideration all the circumstances which will also be reviewed by me before an eviction order is applied for or enforced.

Sir K. WOOD: Is the right hon. Gentleman aware that this man is a cripple, that the Judge has already dealt with the case, and has said that it was a very sad one, that he declined to make the order and adjourned the whole proceedings for a month; and in view of the circumstances will the right hon. Gentleman undertake not to proceed further in the matter?

Mr. PALMER: Under what circumstances has the rent not been paid? Is the man in employment?

Sir K. WOOD: No, he is not.

Mr. JOWETT: I am aware that the Judge has adjourned the case and will consider the circumstances which I have stated, and before an order is applied for or enforced these circumstances will be reviewed again.

Sir K. WOOD: Is the right hon. Gentleman aware that this man is out of employment, and is the right hon. Gentleman going to proceed until the man has alternative accommodation?

Mr. JOWETT: I am aware of all the circumstances, and sympathetic consideration will be given to those circumstanes. Even the hon. Gentleman himself, if he were the owner, could not give more.

AGRICULTURAL PARISHES.

Mr. E. BROWN: 80 and 81.
asked the Minister of Health (1) whether the populations of philanthropic institutions, such as national children's homes, situated in agricultural parishes will be reckoned as parishioners for the purposes of the Housing (Financial Provisions) Bill;
(2) whether the populations of boarding-schools situated in agricultural parishes will be reckoned as parishioners for the purposes of the Housing (Financial Provisions) Bill?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Arthur Greenwood): I will, with the permission of the hon. Member, answer these questions together. I would refer the hon. Member to the replies which were given on the 7th and the 9th instant to his questions on the subject of the proposed additional subsidy for houses built in agricultural parishes.

Mr. BROWN: Has the Minister yet completed the inquiries referred to in the answer, as to the number of villages to be affected by the position of these and similar institutions in the parishes concerned, with regard to the Housing Bill?

Mr. GREENWOOD: I think the hon. Member might wait until the question arises.

Mr. BROWN: How are Members of this House to debate the question on Wednesday unless they have this information before the Debate begins?

Colonel ASHLEY: Cannot the hon. Gentleman expedite these returns, so that we may have them on Wednesday? It is very difficult to debate such a matter without them.

Mr. GREENWOOD: So far as I am aware, the Minister of Health gave no undertaking that he would present to the House a full return of the kind originally suggested by the hon. Member.

Mr. BROWN: Is the hon. Gentleman aware that I made no such statement? The statement I referred to was that in which the Minister said, in his reply to
me, that he was making an inquiry. Since then I have asked for information and have been unable to get it.

Colonel ASHLEY: Will the hon. Gentleman give this information to the House before Wednesday?

Mr. GREENWOOD: Such information as can be given relating to many thousands of agricultural parishes will be given by my right hon. Friend in his statement.

Mr. BROWN: Yes, in his opening statement.

Sir LAMING WORTHINGTON - EVANS: 82.
asked the Minister of Health in how many parishes in the county of Essex the subsidy of £12 10s. per house will be payable under the provisions of the new Housing Bill?

Mr. GREENWOOD: A statement giving this information will be prepared, and sent to the right hon. Gentleman.

Duchess of ATHOLL: 83.
asked the Minister of Health how many villages in the administrative counties of Perth and Kinross will be eligible to obtain the subsidy of £12 10s. under the Housing (Financial Provisions) Bill?

The SECRETARY for SCOTLAND (Mr. Adamson): I am unable to give the names of the villages, but the whole of the 76 parishes, exclusive of burghs, in the two counties, excepting the parishes of Comrie, Glendevon, Arngask, Redgorton, Scone, Tibbermore, Aberfoyle, Callander and Killin, will be eligible for the increased subsidy under the Bill.

Mr. BROWN: Is it not a fact that the proportion of villages left out in Scotland is less than in England; and is not that an injustice to England?

Oral Answers to Questions — HOUSE OF COMMONS (KITCHEN).

Major EDMONDSON: 79.
asked the First Commissioner of Works whether his attention has been called to the unsatisfactory arrangements for the ventilation of the kitchen which serves the Members' dining room; whether he is aware that the present system seriously affects the atmosphere of the rooms and passages adjacent to the kitchen; and
will he consider some improvement, such as the fitting of electric fans, for the extraction of the hot air?

Mr. JOWETT: An improvement could only be effected by the installation of input and extract fans with the necessary ducting at an estimated cost of approximately £3,000. As the cause for complaint is practically confined to all-night sittings, when all the cooking is done in the servery, I do not at present see my way to incur this heavy expenditure.

Major EDMONDSON: Will the right hon. Gentleman at this moment take a walk down the passage referred to in the question?

Oral Answers to Questions — WEST HAM UNION OFFICIALS (TRADE UNION).

Mr. EDMUND HARVEY: 84.
asked the Minister of Health whether his attention has been called to the action of the guardians of the West Ham Union in informing the officers in their service, including the whole-time medical staff, matron, nurses and indentured probationer nurses of the Whipps Cross hospital, that they desire them to become members of a trade union affiliated to the Trade Union Congress, and to the decision of the board of guardians to review the position with reference to existing officers at the expiration of two months from the adoption by the board of this recommendation; whether he has had any communication with the board as to their action in this matter; and whether, in view of the special difficulties that the action of the guardians has caused to the medical and nursing staff, he will take steps to prevent the imposition of such a regulation by the board of guardians?

Mr. GREENWOOD: My right hon. Friend is aware of the action of the guardians, though he has not been in direct communication with them. The guardians do not appear to be exceeding their legal powers, and my right hon. Friend does not see that the matter is one in which he could usefully take any action.

Mr. HARVEY: Does the Minister consider it right that a medical staff and nurses and probationers should have their careers injured if they do not join a trade union affiliated to the Trade Union Congress?

Mr. LANSBURY: Is the hon. Gentleman aware that in an adjoining borough this matter has been quite peacefully arranged between the employés and the authorities concerned, and that one of the Courts has upheld the right of the local authority to impose this condition?

Major MOULTON: Would the Minister also consider whether he would not be called on to interfere if the resolution of the guardians excluded trade unionists?

Mr. W. THORNE: Is the hon. Gentleman aware that the men and women in question do not object to receiving trade union rates of pay from the guardians?

Oral Answers to Questions — TELEPHONE SERVICE (BRIDGE-OF ALLAN, GLASGOW).

Mr. T. JOHNSTON: 86.
asked the Postmaster-General whether he is aware of the delays on the telephone service on the Bridge-of-Allan, Glasgow route; and if, in view of the repeated complaints and protests which have been made to his Department without the delays being obviated, he will say what steps he proposes to take to secure an efficient service in this area?

The POSTMASTER-GENERAL (Mr. Hartshorn): Telephone communication between Bridge-of-Allan and Glasgow is effected through Stirling, and the present number of circuits between Stirling and Glasgow is insufficient to meet the growing demands of the service. Additional circuits are being provided in a new underground cable which is due to be completed shortly.

Oral Answers to Questions — FARM SETTLEMENT ACCOUNTS(SCOTLAND).

Sir F. WISE: 87.
asked the Secretary for Scotland the total profit or loss on the farm settlement accounts in Scotland for 1923–24?

Mr. ADAMSON: I assume that the hon. Member's question relates to the figure for the year 1923–4 corresponding to the figure for the year 1922–3 shown tinder the heading Profit and Loss Accounts in Statement C appended to the last Appropriation Account for the Board of Agriculture for Scotland. The Accounts in question will not be completed until later in the year, and I cannot, therefore, give the figure for 1923–4 at present.

Oral Answers to Questions — BRITANNIC ASSURANCE COMPANY.

Mr. GROVES: 88.
asked the President of the Board of Trade if he is aware that the Britannic Assurance Company is issuing lapse notices to policy-holders during the dispute with their agents, in one instance where only 2d. is owing on a policy; and what steps he proposes to take to protect the interests of these policy-holders who are subject to such hardships?

Mr. GRAHAM: The Industrial Assurance Commissioner has no knowledge of the matters alleged in the question. An Industrial Assurance Company is entitled to issue a forfeiture notice in accordance with the Industrial Assurance Act, 1923, to any person assured who is in default in paying a premium, and the Commissioner has no power to prevent it from doing so. The policy, however, cannot be forfeited for default in payment of the premium or premiums due till 28 clays after the service of the forfeiture notice.

Mr. PALMER: Does not my hon. Friend think that this is a case for the intervention of the Commissioner and that there are circumstances in which the ordinary rule might be reconsidered?

Mr. HANNON: Is it not a fact that the Britannic Assurance Company gave notice to their inspectors that there were to be no notices of lapsed policies during the progress of the dispute?

Oral Answers to Questions — COST OF LIVING (INDEX FIGURES).

Mr. W. THORNE: 89.
asked the Minister of Labour whether careful notice is taken when making up the index figures of the cost of living by those responsible for compiling those figures; if he is aware that in less than two weeks butter has become dearer by 3d. per lb. and bacon by 2d. per lb., while eggs have become much more expensive, and bread has been increased by ½d. per loaf; that recently butter has risen from 1d., 2d., and 3d. per lb.; that New Zealand has been increased by £50 per ton when the supplies have been entering the country on the same scale as ever; and if those increases mentioned in the selling price of commodities are taken into account?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Miss Bondfield): I am aware that there have been increases recently in the retail prices of the articles referred to. So far as these increases had become operative by 1st July, they will be taken into account in the index figures relating to that date, which are now being compiled for publication on 17th July. Increases taking effect since 1st July will be taken into account in compiling the index figures relating to 1st August. I may add that as information as to retail food prices is obtained each month from over 5,000 shopkeepers, there is no possibility of any general change in prices escaping the attention of the Department.

Lieut.-Colonel HOWARD-BURY: Are not these increases due to the rejection by the Government of the Imperial Preference proposals?

Oral Answers to Questions — TURKISH TRIBUTE LOANS.

Mr. FRANKLIN: (by Private Notice)
asked the Secretary of State for Foreign Affairs if he has any further information as a result of his inquiries re the Turkish Tribute Loans, and if his attention has been called to a statement, published in Friday's "Times," setting forth the defence of the Egyptian Government's attitude, and whether the statement contained therein is correct, that the Financial Adviser to the Government, in remitting the first instalment due after Turkey's entrance into the War, informed the Bank of England that Egypt would continue to make these payments provisonally, but that at the end of the War the matter would have to be reconsidered?

The PRIME MINISTER: I am sorry to say that this question only reached me at exactly half-past three, and it is quite impossible, therefore, for me to answer it

Mr. FRANKLIN: May I repeat the question to-morrow?

Mr. SPEAKER: The hon. Member should have sent the question to the Foreign Office at the same time as he sent it to me. I will consider whether or not the question can be repeated to-morrow.

Mr. FRANKLIN: May I say, Sir, that the question was sent to the Foreign Office between a quarter-past and half-past 12 o'clock to-day?

BUSINESS OF THE HOUSE.

Ordered,
That the Proceedings on the Telegraph (Money) Bill he exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

HOURS OF INDUSTRIAL EMPLOYMENT BILL,

"to limit the hours of work in industrial undertakings," presented by Mr. SHAW; supported by Mr. Clynes, Mr. Secretary Henderson, Mr. Attorney-General, and Miss Bondfield; to be read a Second time upon Monday next, and to be printed. [Bill 204.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

County Courts Bill,

Saint Enoch's Church and Parish Quoad Sacra Order Confirmation Bill,

Clydebank and District Water Order Confirmation Bill, without Amendment.

Amendments to—

Haslingden Corporation Bill [Lords],

Lancashire Asylums Board Bill [Lords],

Spencer Settled Chattels Bill [Lords], without Amendment.

Amendment to—

Southern Railway (Dock Charges) Bill [Lords], without Amendment.

Orders of the Day — SUPPLY.

[16TH ALLOTTED DAY.]

Considered in Committee.

[Mr. ROBERT YOUNG in the Chair.]

CIVIL SERVICES AND REVENUE DEPART- MENTS ESTIMATES, 1924–25.

CLASS II.

FOREIGN OFFICE.

Motion made, and Question proposed,
That a sum, not exceeding £92,594, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1925, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs, including the News Department."—[Note: £85,000 has been voted on account.]

Mr. ASQUITH: The first observation which I would make, and which I hope and believe will be found to be in harmony with the general tone of the Debate to-day, is an expression of sincere congratulation to the Prime Minister that the prospective Conference which, during the last fortnight, has been exposed to many hazards, is going to assemble here in London this week. That in itself is, I trust, a milestone on the road of progress, so long and so fitfully pursued, so often interrupted and even broken up, to the goal of an international settlement. We have had, since the Treaty of Versailles was signed, exactly five years ago, many Conferences, each of them preceded by sanguine official predictions of complete international concord, but it is with a faith chastened by damping experiences, and hope over and over again cheated of fruition, that we witness this fresh adventure into the ocean of uncertainty. It has all our good wishes—from men of all parties and classes, not only in every quarter of this House and in this country, but throughout the Empire. Those wishes, I can assure him, the Prime Minister will carry with him in full measure into the council chamber of the world. It is, in my opinion, of primary importance that nothing should be said to-day which could tend to hinder or
hamper him in a task of supreme difficulty, upon which momentous and far-reaching issues depend, and I shall try, in the few words that I feel it my duty to say, not to add to his embarrassments, still less in any way to impair his authority to speak on behalf of the country as a whole. But I think it is the right of the House of Commons—and I am sure the Prime Minister agrees with me—to discharge, with the same candour and freedom of speech that was shown last week in the French Senate, the duty of review, of criticism, and, if it so may be, of suggestion.
The origin, or at any rate the immediate occasion, of this Conference is to be found in the conversations which took place at Chequers on 21st and 22nd June between the Prime Ministers of this country and of France. Their object was—a most necessary and desirable object—to concert arrangements for putting into force the Dawes Report. The purport of what took place at Chequers, as understood by the British Government, is set out in the despatches in the White Paper, that of the Prime Minister to Sir Ronald Graham, and to Baron Moncheur, I think on 23rd June, and that of the Foreign Office from Sir Eyre Crowe to the Director of the French Foreign Office, of 24th June. In all these documents two things were clearly stated or implied, on behalf of the British Government: first, that the Dawes proposals go beyond the scope of the Treaty of Versailles; and, next, that the duty of declaring in the future whether there has been flagrant failure—that was the expression used—to comply with them, must be entrusted to some authority other than the Reparations Commission. A new Protocol, therefore, it was suggested, would be needed, a new Protocol, that is to say, supplementary to the Treaty of Versailles, the proper interpretation of which should, in ease of dispute, be submitted to some such body as the International Court at The Hague.
I pause here to say a word, if I may, as to this, the most recent, example of the methods of what is called the new diplomacy. I have seen a great deal in my day, a great deal, of the old diplomacy, and I know well both its merits and its defects, of which the one most frequently challenged was its
habitual recourse to secrecy. But we are in essential respects, or I will put it in an interrogative form, are we in essential respects, and especially in this matter of secrecy, much better off under the reformed procedure which now prevails? During the War, and for a time after the War, it was necessary to give the go-by to conventional routine, and it became the practice, and I think it was an inevitable practice—I was more or less responsible for it myself—for the leading statesmen of the Allies to meet personally to discuss situations, to concert plans, to provide for contingencies. These exceptional conditions no longer exist, and I confess—I say it without any reflection upon anybody—I am coming to doubt whether we are not in danger of more harm than good from the substitution for the old system of ambassadorial interchange of this new procedure of the tea table and the railway station, tempered and supplemented by sporadic and often ambiguous communications to the Press. Under it you have neither full reticence nor full publicity, but often a misleading mixture of both. You have, as these recent happenings prove, understandings supposed to be arrived at which, at any rate, turn out to have a strong family likeness to misunderstandings, and you never know exactly where you are.
4.0 P.M.
Take what happened a week ago. I am not in the least blaming the Prime Minister or the Foreign Office; not at all. French opinion being what it is, and what for a long time we have all known it to be, I think it is a matter of surprise that Sir Eyre Crowe's letter to Count Peretti della Rocca was not followed by an immediate response of a challenging kind from Paris. That, I do not understand, nor, I think, does anybody. But French public opinion, whatever the French Foreign Office did or did not do, at once manifested itself in the most unmistakable fashion. I think, as I have more than once said in this House and outside it, that with the best will in the world, and in spite of the difficulties which M. Poincaré has put into our path during the last two years, our people here do not adequately realise the French feeling as to the sacrosanctity of the Treaty of Versailles. I am sure that is the case. We are apt to forget that that Treaty was
originally supplemented and safeguarded so far as France was concerned by the two Pacts between France and Great Britain and France and the United States of America. Those Pacts have both gone, they have disappeared, and they cannot and will not, in that form at any rate, ever be revived. What is the result? France has nothing left to ensure her future security but the Treaty of Versailles; nothing left but the Treaty of Versailles, either to provide compensation for her War losses and sufferings, or to guarantee her future security. Unless you realise that you cannot understand, as we ought always to try, imaginatively, to understand—putting ourselves in the place of other people—French sentiment about the Treaty of Versailles. Further, the main safeguard—indeed, the only safeguard—given to her by the Treaty is the Reparation Commission, on which France has, and has had from the first, a permanent majority. I pass no reflection, certainly no adverse judgment, upon the admirable work—much of it has been admirable—done by the Reparation Commission, but it has been from first to last, as everybody knows, under the domination of the French Government; that is to say, the ultimate and deciding vote has been given by France. It is true that there was, I think for the first two years, an American. He was not a member of the Commission, because the United States have refused to be parties to the Treaty of Versailles; but there was an American observer, voteless, and I was going to add speechless, but about that I am not at all sure. At any rate, he had no vote, and he was there really without any kind of authority.
It is essential that those two things should be remembered. I am saying this, the right hon. Gentleman will see in a moment, not by way of criticism, but rather by way of commendation of the course which he ultimately took. It is necessary for these things to be remembered if we are to understand and do justice and fairness to the French position. The Prime Minister by his visit to Paris no doubt saved the domestic situation of M Herriot's Government. There is no doubt whatever about that. He also saved the existence, and, I trust, the effective activity of the Conference. By what concessions he saved it may be
seen by a comparison between the so-called Chequers Agreement and the Franco-British Memorandum of last week.

The PRIME MINISTER (Mr. J. Ramsay MacDonald): There was no Chequers Agreement.

Mr. ASQUITH: Well, the Chequers Conversations.

Mr. MASTERMAN: Accord.

Mr. PRINGLE: General agreement.

Mr. ASQUITH: I do not know what the proper English word may be. The new diplomacy requires a new vocabulary. Neither the French nor the English, still less the translation of one into the other, has ever been able to supply the word. Whatever you like to call it, if you compare the document—that is a neutral phrase at any rate—that emanated from the Chequers Conference and was communicated to Italy, to Belgium, to Japan, and also to the French Foreign Office, with the Anglo-French Memorandum of last week, the discrepancies and divergencies are too patent to require statement. The proposal for the substitution of the Reparation Commission by an impartial and independent authority has gone it is nowhere to be found in the Anglo-French Memorandum. There appears in place of it the suggestion—a very good suggestion—for the appointment of an American member of the Reparation Commission, and, if that turns out to he impossible and a difference of opinion ensues, the calling in of a person who must be an American to arbitrate.
At this point, I pause to address a question to the right hon. Gentleman. He need not answer it, of course, if he thinks it contrary to the public interest, but I think the House is entitled to know anything that he is at liberty to disclose. I should like very much to know whether he has any reason to believe that the Government of the United States, the Government either actually in power, or any of those contingent and uncertain claimants and competitors for its inheritance which sooner or later in the course of this year will take its place—whether either the actual American Government or any Government which he conceives is likely to take its place is or can be expected to be favourable to the appointment of an American member of the Reparation Commission, or—and that is the alternative—favourable to the
nomination of an American arbitrator to determine in that event, as suggested, any differences that may arise? I do not know what the answer to that question may be, but in principle the French contention that the Dawes Report ought to be treated, not as a supersession, but ostensibly at any rate as an application of the principles of the Treaty of Versailles has been, I gather, accepted by the right hon. Gentleman. I am very glad that it has been. I only point out that the situation in the course of a week underwent a vital transformation.
Further, the French contention equally strongly held is that prima facie, at any rate, the Reparation Commission, strengthened it may be, supplemented it may be—it is extremely uncertain whether that can practicably be brought about—shall be the judges of default. Those two points, strongly emphasised in the original British presentation of the case—I will not use the word "accord" or "agreement"—as the result of the right hon. Gentleman's visit to Paris and his negotiations there have now completely disappeared. You have only to read, as I have been reading, and I advise hon. Gentlemen generally to read, the very remarkable speech made by M. Poincaré in the Senate—it is very long; I am not going to quote more than one passage—to sea what a difference that has made in France. The result is, and I am very glad of it, that the Conference which is to be held on Wednesday opens in a clearer and a more friendly atmosphere than a week ago could possibly have been anticipated. I purposely abstain, of course, from entering here and now upon the topics which will form the subject of the agenda of the Conference.
But there are two points of very great significance which do not touch, at any rate, upon the official programme of the Conference which I think here in this House we ought to emphasise. The Anglo-French Memorandum concludes in these terms:
The two Governments have likewise proceeded to a preliminary exchange of views on the question of security.
Observing how much—I am quoting from the document—public opinion desires complete pacification we are agreed to seek the best means of obtaining this end either through the intermediary of the League of Nations or possibly through
any other channel and to continue the examination of the question and the problem of general security of nations until it has received a final solution. I think that is a very wise and proper course to take, and I wish to illustrate its importance and, if I can, to indicate the views which I and many others hold on the subject in a few sentences before I sit down. The first point is a very vital one to the future Anglo-French relations, namely, the evacuation of the occupied territory on the West Bank of the Rhine. The House, of course, is aware of the provisions on this point in the Treaty of Versailles. They are to be found in Articles 428 and 429. Let me just read the material parts of both. Article 428 provides:
As a guarantee for the execution of the present Treaty by Germany, German territory situated to the West of the Rhine, together with the bridgeheads, will be occupied by Allied and Associated troops for a period of fifteen years from the coining into force of the present Treaty.
That is, I believe, the authority, contained in that provision, on which our troops have now for the best part of five years been in the occupation of Cologne and that district. Then the next Article goes on to provide for the progressive evacuation of the occupied territory, and the material part, so far as we are concerned, is to be found in the opening words of Article 429:
If the conditions of the present Treaty are faithfully carried out by Germany, the occupation referred to in Article 428 will be successively restricted as follows:—
And here comes the material point for my present purpose—
At the expiration of five years there will be evacuated: the bridgehead of Cologne and the territories north of a line—
geographically described, which practically means the territory which has hitherto been occupied by British troops. Those five years will expire in the month of January, 1925. According to the provisions of Article 429, our troops will then cease to have a legal title to continue the occupation. The French, as the right hon. Gentleman well knows, take a totally different view. M. Poincaré has always taken a totally different view, and I will venture to read M. Poincaré's speech to the Senate last week which shows quite clearly—and this
is very important—that he is still of the same mind. He said:
The French Government have always declared until this moment that the date fixed by the Treaty for the occupation has not vet commenced to run,
What about the first day the five years? That still has not arrived. That has been the contention throughout. I gather from his speech he does not know whether M. Herriot shares that view or not. I trust very much he does not.

Mr. AUSTEN CHAMBERLAIN: He does, he takes the same line. He said so.

Mr. ASQUITH: If he said that, then I am wrong. M. Poincaré, goes on to say the attitude of the British Government is absolutely "impenetrable." I trust it will continue so. This is a very serious question that will arise in the immediate future—in the month of January next—and you cannot, as the right hon. Gentleman knows, adjourn consideration of its examination until the end of the year. These things have to be anticipated and provided for in advance. I should like the House to be told what steps are or have been taken to arrive at a conclusion in the matter. Look at the consequences if you do not arrive at a conclusion. The British troops under what we regard as a Treaty obligation will evacuate Cologne. Under the evacuation contemplated by the Treaty it reverts not only to German sovereignty, but to German occupation and possession. I think it is our plain duty, a clear Treaty obligation, to carry out our word in that respect. It is impossible to do otherwise in view of the difficulties—and that is the mildest word which one can use, but it is an appropriate one—that will arise when that moment arrives, unless the right hon. Gentleman succeeds in coming to some arrangement with the French Government and the rest of the Allies.
There is another point, a final point which, after all, is of more serious importance. I mean the general question referred to in the final sentences of the Anglo-British Memorandum—Security for France. Although I am not complaining of it, that security is not included as part of the agenda of the Conference. I have always held, as I think the right hon. Gentleman holds, that this paragraph would not have been inserted in the Memorandum unless both he and the French Government saw hovering in the
background and to a large extent conditioning any settlement of the Dawes Report which may be arrived at by the Conference, this question of security. I view it as of the greatest possible importance that the British point of view in this matter should be made absolutely clear. If the Committee will allow me, I will, in a few sentences, indicate what I myself and a great many of my friends—I do not suppose our views are limited by the confines of party; they are shared by a very large number of people in this country—hold with regard to that matter. To a large extent, the whole future of any international settlement depends on how you deal with this question of security.
What are the conditions under which we ought to proceed to attain that great purpose? First of all, in our view, any assurance or guarantee given to France ought to he given not as a separate guarantee to France but as part of this country's general undertaking under the Covenant of the League of Nations. Next the security offered, whatever it is, to France should be offered on equal terms to Germany. Thirdly, in order that that may be possible it is obvious that Germany must be admitted to membership of the League of Nations and also, through her representative, to a seat on its Council. To some extent you may say these conditions are negative. But that is not enough. The French will demand and will I think be entitled to demand something more. What I believe the opinion of this country is coming increasingly to believe is that the British Empire—not only this country but our Dominions—and I will say a word about them in a moment—the British Empire should undertake to guarantee both to France and Germany to use all its powers against either State which pressed a quarrel against the other, without calling into use the machinery of the League. It ought not to be a question of guaranteeing territories or the status quo. It ought not to apply to France or to Germany alone. It ought to be collective, general and indeed universal to all parties represented on the League of Nations, collective and universal as far as they are concerned, but general to the world at large against any Power resorting to force in breach of the Covenants of the League. That I believe many of us are coming increasingly to believe is the only effective and practical form, and certainly the
only fair and legitimate form in which any guarantee of security can be given. That is going beyond the exact literal terms of the Tenth Article of the Covenant of the League of Nations, but it is only an amplification of that Article, an application and interpretation in the spirit in which it was conceived and for the purpose for which it was intended. At the meeting of the Assembly of the League last year, 1923, Canada, followed by all the Dominions who were there represented pressed an amendment limiting the obligations under Article 10 of the Covenant, ultimately to the discretion in any emergency of the various national Parliaments. I quite understand the sentiments which prompted the Dominions to adopt that resolution, and one must always bear them in view. We must carry them with us if we are to have the whole force of the British Empire arrayed on behalf of this general security intended for all nations. Therefore, I think the policy I have just been recommending ought to be submitted to and endorsed by the Dominions before it is possible to carry it into effect. If we can get that, and I am sanguine enough to believe we can, if we can get the joint authority of the Dominions to join with us in any such pact of security, not partial, not one-sided, not local, not temporary, but applying over the whole range of the Covenant of the League, we shall take the longest and the strongest step that has yet been taken or that is likely to be taken to obtain the real objects of the League, the prevention of unnecessary quarrels and the maintenance of the permanent peace of the world. I do not think that is irrelevant to the discussion in which we are now engaged. I will only say, in conclusion, the right hon. Gentleman has with him the hearty good will and fervent hopes of all parties in this country that this Conference shall take us further than any previous Conference has taken us on the road which we all desire.

Mr. BALDWIN: It is never an easy task to follow the right hon. Gentleman the Member for Paisley (Mr. Asquith). I do not know which is less difficult—following him after an attack or following him when he is developing an argument with which one is to a great extent in sympathy and upon which one has to speak. He doubtless will remember a very great man who lived some years ago,
Dr. Barrow, who was always spoken of as "the inexhaustible Barrow," because when he had dealt with a subject, nothing remained to be said. That is very much how I feel this afternoon. But there are one or two points which must strike one who has been more recently responsible for dealing with this subject, and it is in that capacity I wish to make a few observations this afternoon. I have a number of questions to put-to the Prime Minister, and it will be of great interest to the Committee if he can answer them. He put a great many questions to me last year, and I will repeat to-day what he said to me last year, that if he says it is in the public interest that he is unable to answer this or that question in the circumstances of the day, we shall deem that as a satisfactory reason for giving no further reply.
I do not think that anyone who sits on these benches and behind me can be present at this Debate to-day without feeling how great a change has come over the vision of the dream of hon. Gentlemen opposite from the time when they sat in Opposition last year. Last year, in every speech they made, if there was one thing they were going to do when they came into power, it was to revise the Treaty. From the lips of the Prime Minister and the Lord Privy Seal during last year that was the one cry, and it was the cry at the Election, but, as soon as it became obvious that they might attain power, that cry dwindled to a whisper, and the last twittering swallow left over from the winter spoke at Burnley. We none of us know what notice was taken of that remarkable outburst, but it was never repeated, and we know from what the Prime Minister said on the 7th July in this House, that there is now no question of revision of the Treaty. That means that the Government have come into the maintenance of the full continuity of the foreign policy of this country with regard to their handling of the Treaty and the settlement of the questions arising out of it, and it means that they recognise that, in conjunction with France, all things are possible, but, if France and ourselves are opposed, no progress can be made.
That is a very great thing to have learnt and to have done. But there is one more thing I should like to say, and it is this. The Government have been extremely fortunate, blessed beyond all
Governments, in the circumstances of the last few months. Just before we left office, we succeeded in obtaining the appointment of the Dawes Committee, and securing on that Committee American representation, with the full assent of the Allies—no mean performance—and all that the Government had to do was to sit still, say nothing, and wait until the experts reported. They had some months of breathing space, free from criticism, free from questions, and with nothing to do but study the subject, and make up their minds what their course of action would be when the Committee reported. They had, moreover, a change of Government in France. Not that I would criticise any Government in a foreign country, but I will observe that it was supposed that the temperament of the new Government would, possibly, make it easier for negotiations to proceed than that of the late Government. More than that, we had a new Government that was going to try new methods. It was the fresh mind and the new spirit, or, as an intellectual would say when he dislikes positives and superlatives alike, but deals in comparatives, it was the fresher mind and the newer spirit. There came a Conference at Chequers, and, as we all know now, a complete agreement was reached. The right hon. Member for Paisley said that for the new diplomacy you need a new vocabulary. I will observe—and the right hon. Gentleman will correct me if I am wrong—that I consider these words "complete agreement" the most perfect instance of the lucus a non lucendo.
What happened after the Chequers Conference? There was a storm—a storm in a teacup, the Prime Minister called it. It must have been an extremely potent brew in that teacup that made the Prime Minister, or, shall I say, gave him the power to talk in this House for three-quarters of an hour and leave the whole House more mystified when he sat down than when he rose. And, I may add, it must have been a very large teacup for the storm in it to send our Prime Minister, at a moment's notice, to Paris. No; we know now, having read the correspondence that was published after his speech, that there was a lack of wisdom in the character of that correspondence which very nearly slew the Conference before its birth. It arose in this way, and we rejoice to know that the Prime Minister has now convinced our Allies
that the words in that corresponded, I do not always bear the literal meaning that might be attached to them. We know now the new diplomacy made our Allies think that we were contemplating the revision of the Treaty and the supercession of the Reparation Commission. I think the mistake arose in this way, that in more than one of the letters to our Allies other than the French, there is some such phrase as this, "the engagements to be undertaken by Germany go far beyond those imposed by the Treaty of Versailles," and the conclusion drawn from that was that the Allies would promptly withdraw their sanction, and the Reparation Commission could not be the authority to decide.
Now, was it wise at that moment to have issued a communication of that nature? You touch immediately on the two tenderest places in the French imagination. Remember, it was particularly dangerous for the party now in power to do that, having regard to their utterances before they came into office. It will be a great relief to our Allies, as to this House, to know now that the impression conveyed by those words was a false one. But if it was not wise with regard to our Allies, was it wise with regard to Germany? Because, at this moment, to point out to them that, in our view, the Report of the Dawes Committee was something outside the Treaty, could not have made it easier for the Allies to get that prompt acceptance of the Report at the hands of Germany which is essential at this time. The Committee will remember that the points raised in the communications to the French Foreign Office justified equally the popular fears that were roused in Paris on receipt of the letter—fear as to the revision of the Treaty, fear as to the supersession of the Reparation Commission. We realise only too well why the Prime Minister had to go to Paris, and we are glad to see in the reported agreement which appeared in the "Times" on the 10th July, and of which a White Paper has been issued this morning, that so far an agreement has been arrived at, that is to say, an agreement which will permit the Conference to be held, with every hope we on this side of the House feel, and everyone else does, that something may be accomplished; but it was not easy to do, and the new bondholders had to be introduced to ease the
situation, and it was said that measures to create confidence in the new bondholders are not incompatible with respect of the dispositions of the Treaty of Versailles.
We have been able, I believe, to get out of the difficulty that way, but I wish to ask one or two questions about the succeeding paragraphs. I do not think they are questions which should not be put, and I think they are questions which can be answered, but, as I have said before, I am perfectly content to leave this in the discretion of the Prime Minister. It is not clear in sub-head (c) of the fifth paragraph if an American is to be appointed ad hoc, or as a regular member of the Reparation Commission. I should like to re-echo the question put by the right hon. Member for Paisley as to whether the Government have any indication of the answer they are likely to get from America. If there is a prospect of a favourable answer, I shall be extremely glad. I am not clear whether unanimity is to be required on the Reparation Commission as to default. If it is not, arbitration is to be the method of solution, assuming that an American arbitrator can be procured. There are one or two difficulties about that. In the first place, in so complicated and technical a matter, it is difficult for an arbitrator to be able to form a clear view and give a clear decision, if he has not that intimate knowledge which he would have acquired if he had been a member of the Reparation Commission. Moreover, there is this point of view. There are four members of the Reparation Commission. Supposing they fail to agree, with three on one side and one on the other, and the Arbitrator gives his decision in favour of the one as against the three, it is very difficult for me to imagine that a decision of that kind would prove to be a workable one amongst the Allies.
I should like to ask the Prime Minister if he has ever explored a plan, which, I think, would have been a better one, and which, I think very likely we should have suggested ourselves, had we been in when the Dawes Committee reported. Would it not be possible to appoint an ad hoc Committee to consider the question of default, a Committee to be appointed by the Reparation Commission, on lines
exactly analogous to those on which the Dawes Committee itself was appointed? You would obviate, then, any difficulty about the body being outside the Treaty, and you would have a body which would be admirably qualified to do the work that would be put upon it. The next subparagraph contains a question which has given us some cause for anxiety, an anxiety which is somewhat allayed by the version in the White Paper issued this morning, which differs in one important respect from the report in the "Times" of the 10th July. It is the question of putting into force sanctions. In the "Times" of the 10th July the phrase was, "sanctions that the Allies shall have agreed upon." The phrase in the White Paper is, sanctions which the Allies "shall agree." The Committee will at once see the difference. I was afraid, and my Friends were afraid, that sanctions would be agreed upon and that there would be nothing to do, when the Arbitrator had given his decision, but put into force those sanctions previously agreed upon. I am quite sure the Committee are anxious to learn whether those sanctions are likely to be devised in the near future, and, if so, whether they will come before Parliament for examination and ratification; whether, in the case of any of the other Allies, they will come before their Parliaments; and, in any case, to have it made clear whether the sanctions are going to be devised before the question of default arises, or whether they will only be considered when the question of default has arisen and been decided upon?
Paragraph (g) is rather involved, and I think the Committee will like to know whether it means the distribution of receipts will be discussed at the London Conference, and, if so, whether the Spa settlement will still stand, and Whether any question of priority will arise. The Prime Minister has said something about the presence of Germans. I understand that the Conference will be opened without the Germans, but that in the event of agreement amongst the Allies at later period the Germans will be invited to attend. I think the Committee ought to pause for a moment to look at this aspect of the question—that is, the very great alleviation which has been offered to Germany by the Dawes Report. I mention that to show that there ought to
be no hesitation on the part of the Germans in accepting the Report. I hope that it will be possible for the Conference so to conduct their business as to obtain this consent from the Germans with the least possible delay.
First of all, the Germans will get a stabilisation of their currency through the new proposed banking issue aided by a loan of £40,000,000 sterling. That is very remarkable treatment for a beaten enemy. I pause for one moment to touch upon a question which I think is of the greatest importance. If the Germans accept the Report, and if this loan is raised, a considerable portion of it will be expected to be raised in this kingdom. If it is to be a success that must be the case. But you cannot get away from this: that in setting Germany up in business you are restoring at one blow your own greatest and most formidable competitor. What are you going to do about that? This country has recently decided that it wants all the foreign goods it can get into this country; but it is just possible it will get more than it wants under this; it is just possible that unless people can be assured that this point is not lost sight of the loan itself may be a failure. I therefore ask the Prime Minister, if he has not already considered it, if he will consider this question, that if they get so far during this Conference he will take steps to see that German industry, by taxation or by any other means, shall be penalised to no less an extent than our own industry is at the present time, by the competition which is bound to result as a consequence of the loan that we, with a million unemployed, will be asked to make good.
The second alleviation the Germans have is this: that in carrying out the recommendations of the Dawes Report there is the minimum of interference possible in their internal affairs, less interference than has been the case in the resuscitation of Austria and Hungary in which this country has played so admirable a part. Thirdly, the regulation of the amount of reparation is to be decided by taking into account a newly devised index of prosperity, which means that the Germans themselves are protected against the fear of having too heavy reparation taken from them in times that would make it exceptionally difficult for them. They are considered at every point. The Committee will have heard with relief that at
this first Conference, called for the purpose of putting the Dawes Committee's Report into working order, the question of the inter-Allied debts and of security is not to be raised. At least, I understand that. If that be so, I think it is wise. One step at a time, however small that step, is the only way in which you are going to make any progress which will lead to any result.
I would only say in conclusion that no one in this House in diplomacy would go back to the days of Bismarckian Blood and Iron. But there is a happy mean between Blood and Iron and Matthew Arnold's Sweetness and Light. Sweetness and Light? They very nearly brought the Conference to death before it was born! I hope with all my heart the Prime Minister will now succeed in exercising that happy mean. The Conference is going to meet. It has had a very narrow escape. We rejoice in this House that the fears which we formed a week or two ago have proved to be groundless. I can assure the Prime Minister, following my right hon. Friend the Member for Paisley, that, we on this side of the House wish him well in this most difficult task. If it should fall to him to achieve a success which has not fallen to the lot of his predecessors for some time past, there will be, at any rate on our side of the House, no grudging and no envy.

The PRIME MINISTER: I think it would be most unbecoming of me if I were tempted, beyond a very playful limit, to follow the somewhat controversial lines that my right hon. Friend the Member for Bewdley (Mr. Baldwin) has adopted, at any rate in certain parts of his speech this afternoon. I am profoundly grateful to my right hon. Friend the Member for Paisley (Mr. Asquith) not only for his kindly words at the beginning and the end of his speech, but for his very helpful speech, indicating, as it does, the lines upon which, whoever be here or whoever be responsible, the foreign affairs of this country must be conducted in relation to France, and French public opinion. My right hon. Friend the Member for Bewdley said, and said quite truly, that this is not our doing. We inherited some good things, and the Experts' Committee was an inheritance. I have never refrained from putting upon his head all the laurels he earned for the part that the Government which preceded
this played in the appointment of that Committee. There is no doubt whatever that the fact that that Commitee was appointed, the fact that Americans were present on the Committee, contributed enormously to the possibility of beginning afresh friendly, or, at any rate, more friendly relations with France. The only thing my right hon. Friend can complain of is that we took the opportunity. I am not going into the question of why certain matters arose last week. For the moment that is closed; and I am far more interested in the day after to-morrow than in last Thursday.
The question of how far certain obligations imposed upon Germany by the Dawes Report may or may not go—there is no question that those who talk inaccurately about the Dawes Report being an addition to the Treaty of Versailles do not use accurate language—the only question is whether in respect to one or two points the Dawes Report does seek to impose upon Germany obligations which are not legally within the interpretation of the Treaty of Versailles. That matter has been referred to legal experts. There it will remain until the reports conic before the Inter-Allied Conference this week or next. This is the simple fact that remains quite evident; it was absolutely essential, after the publication of the Dawes Report, that negotiations between the countries should be preceded by conversations between the Prime Ministers and the Foreign Secretaries. That was done. It can be said that this was secret diplomacy, or that it was open diplomacy. I am not interested; not in the least interested in that. What I am interested in is this: that so far had things gone, so much out of touch had we got by delays of various kinds and by misunderstandings of various kinds, that before the Governments, as Governments, could get into sympathetic relationship, the heads of the Governments had to meet and to explore the field together and see exactly where their two Governments stood.
There is a phrase at the end of the first communique which talks about a "complete joint understanding." The right hon. Member for Bewdley chided me about that. Is that the first time he has come across a phrase like that at the end of a communique issued after the British Prime Minister met the French Prime
Minister? How is it that he has discovered at this late hour that this is new diplomacy, and not old diplomacy? Did not ho himself in that remarkably abortive conversation he had with M. Poincaré—was this new diplomacy or was it old—issue a communique saying it was a complete success? Let the dead past bury its dead! There is one consideration that we must take into account. We may have been as human as some right hon. and hon. Members below the Gangway seek to make out we were. We may be as human as they profess to be. Nevertheless, this policy has been pursued by me from the very first day I crossed the threshold of the Foreign Office as Secretary of State. I did not believe, I do not believe, that there can be peace in Europe until Great Britain and France reach a measure of unity that has been remote from them for some years. I have purused that policy in every way I possibly could, and that is the policy for which I am responsible. In the pursuit of that policy, France, owing to circumstances, has come to regard the Treaty of Versailles as something akin to the Ark of the Covenant. Any suggestion to put it aside at once arouses fears which, if the suggestion is made innocently, simply amaze one, but there it is as a fact.
5.0 P.M.
There is another fact. To begin to suggest that the security which France thinks it now has from the operations of the Reparation Commission ought to be modified, to say nothing of it being removed, arouses the same feeling. My right hon. Friend the Member for Bewdley talked about a misunderstanding that arose on the publication of that document last week. Why? When this Government said not that there was French agreement on that point, but that when the Conference met the position of the Reparation Commission in relation to the new economic and political circumstances created by the Dawes Report would have to be reconsidered, why was that used, as I think so unfairly, by the Opposition Press in France creating something approaching a panic.
The right hon. Gentleman gave the most extraordinarily innocent account of my reference in that respect. Would he be surprised if the explanation was himself and his own Government? What
right have right hon. Gentlemen opposite to come and accuse me of arousing suspicion in France because I have suggested we may have to consider the operations of the Reparation Commission? When did they change their mind? The fact of the matter remains that even now, supposing the case in favour of the consideration, say, of the composition, say, of the power, say, of the way of working of the Reparation Commission, is made out against France, and France were to allow its feeling to run away with it, rather than allow its thoughts to guide it, the explanation would be the action taken by the Government of which the right hon. Gentleman opposite (Mr. Baldwin) was the head. I have sent for the report of the Inter-Allied Conference on Reparation and Inter-Allied Debts in London and Paris in December, 1922, and January, 1923, and what do I find? I find on page 119, Schedule B, a Memorandum put in by the Government. What does it say? The right hon. Gentleman criticises me for raising the matter, and accuses me of bringing this most hopeful approach of the day after tomorrow to an untimely end, a sort of pre-natal death. What did they say when they were dealing with the same point?
Whatever form of local control should lie decided upon, it should be responsible and independent—that is not subject to the Reparation Commission sitting in Paris.
What more?
It would be necessary to provide that the German Foreign Financial Finance Council should sit without the German Finance Minister, whenever occasion requires it, to exercise the executive powers at present possessed by the Reparation Commission and by the existing Committee of Guarantees.
That is not my proposal, nor the Liberal party's proposal, but the proposal of the party opposite. This is the next paragraph:
If the Reparation Commission is retained at all, it should be as a purely judicial body with such changes of constitution as may appear to be desirable.
These are the innocents who, for the purpose not of giving me trouble—at any rate that I think was never intended—but for the purpose of this Debate, have changed their mind, and no longer stand by the documents for which I found myself responsible last week in Paris, because they had been the official suggestions of a Government in Britain.
Again, perhaps we might let the dead past bury itself. In any event if that be not done, nobody has less cause to blame me for raising any doubts whether it is right or wrong, whether the cause is reasonable or unreasonable, just or unjust, and nobody else has less cause for accusing me than the right hon. Gentleman the Member for Bewdley.
There is another point. We have to remember that whilst we must give France every security about the Treaty of Versailles she wants, we must be exceedingly careful that France does not extend the legal provisions of that Treaty. That is not a new trouble. Whoever has had to handle, as the right hon. Gentleman opposite has had to do, the trouble given by the Rhineland Commission, knows perfectly well it is our duty, if we stand by the Treaty of Versailles, to stand by the actual Treaty, and not something which is over and above that Treaty. There is something more. It is quite true that the right hon. Gentleman opposite raised the question of the position of the Reparation Commission. It is quite true that it was further suggested that it should be raised by us for the purpose of discussion and put on the Agenda, and form part of the business for which we would be responsible when the Inter-Allied Conference met. But what are you going to do in reference, not to theoretical problems and questions that we might put to each other, but actual experiences. What I am very anxious to do is to secure that these questions should not have to be fought out and perhaps quarrelled about in advance of the Inter-Allied Conference, at which the Dawes Report and the Dawes Report alone should be considered and put into operation.
There are many points, but I will only deal with one. I do not think it is necessary to go into all the details, and the Committee will forgive me if I do not do so. The position is this, and I mention it to show the difficulties of the negotiations into which we are about to enter. When it was a question of the Allies on the one side, and the Germans on the other, and the Allies were imposing upon Germany economic or political disabilities in consequence of the Treaty of Versailles, the Reparation Commission, political rather than judicial in its mind, acted
upon a majority—a majority at any rate theoretically obtainable by the French delegate voting twice, once as an ordinary member of the Commission and then as Chairman in case of a tie. Such a condition of things, such a machine cannot be acceptable. As a matter of fact we found it would not work. That is what is nine-tenths of our trouble now. It is that the Reparation Commission has ceased to work, and to all intents and purposes, certainly so far as the occupation of the Ruhr is concerned, it has been scrapped, and the decision and the initial and subsequent action has been taken, not by the Reparation Commission, but by the Governments, and the Governments, not acting together, but acting on their own individual initiative.
I put it to this Committee, and I am doing my level best to put it as effectively as I can to our French friends. Can that state of things exist consistently with two aims that I want to secure—first of all complete unity between them and us, not to be gained at this Conference but to be begun at this Conference; and secondly, favourable prospects, if they and we and the other Allies agree to go to the American investor, to the City of London investor, the Dutch investor, or—and I think this is essential—the French; investor, because I do not see why the French financier should not also take his risks; how can we go to the outsider, not to the man whose mind is inflamed by political feelings, but to the man who is concerned with putting £100 into something from which he is going to derive an annual income and say, "The security that Germany, as a going concern, gives to your investment of £40,000,000 can at any moment be worsened by a political act, taken by a majority of the Reparation Commission or even by an individual government acting by itself."
That is the trouble you have to face. We are almost on the horns of a dilemma. France says, and we sympathise with her—every word that the right hon. Member for Paisley said on that point finds an echo in my own mind—"We must retain the security of the Reparation Commission." The creditor says, "You ask us for the loan of £40,000,000. If we do not give you that money, you can pass as many Resolutions as you like about putting your Dawes Report into operation, but the Dawes Report will never be put into operation, and never can be put into
operation until that money is forthcoming."
This is an essential element in the new situation created by the Experts' Report, and I will not go any further. I doubt if he will accept the security merely of the Reparation Commission. If he would, good and well, but the position I take up, the position which is quite clearly adumbrated in the agreement we came to in Paris, is that the creditor who is to be created should have a security which is satisfactory to him. That is a matter for negotiation. Perhaps if I do not answer all the questions that he has put to me, my right hon. Friend will remind me at the close of anything that I may have left out. Most of them, I think, related to this matter of the Americans. The right hon. Gentleman the Member for Paisley also asked me a question about that. At the moment I have nothing of a definite character that I can say. The matter is not being left until Wednesday, or Thursday, or Friday, but there is nothing settled, except that, I think, it is perfectly evident that in the first place an official representative of the American Government is quite impossible.
For one reason, I am informed that, before such an appointment could be made, legislation would have to pass through Congress, and that is out of the question. I am assuming that there is no political objection; I am assuming that Members on all sides would receive the proposal with open arms. I assume that, because, when I have assumed that, I have got to make this discouraging announcement, that it could not go through till August. Even then, the proposal regarding his position, so far as it has been made, is that, if he is going to be on the Reparation Commission, France undoubtedly will insist that his action upon the Commission—at least, I think so; such is the impression I gathered, not merely by recent talks with M. Herriot, but with the other political leaders whom I met in Paris the other day—France would insist that the extra appointment to the Reparation Commission, by reason of the fact that the Experts' Report can only be put into operation on the floating of a £40,000,000 loan, should have his duties confined to the safeguarding of the creditors of that loan, bat he would speak and he would vote.
With reference to the alternative proposal about arbitration, again, that is just put down as another possibility, because the Committee must remember that this gentleman who is mentioned, the Reparation Agent-General, is not likely to be exactly as described by my right hon. Friend the Member for Paisley. He is not an outsider. During all the working of the Dawes Report, he has his hand on everything that is being done. He knows, on account of his central position, his key position in the machinery that is created by the Dawes Report, how this control is working, how that control is working, and how the other control is working. He knows the state of the pool, he knows the payments that are being put in. He has got at his command every conceivable particle of information that would enable him to come to a judgment regarding whether this is a wilful default or whether it is a default of the nature of a breakdown. Such a man, if the creditors will agree, might very well be appointed as a sort of arbitrator.

Mr. AUSTEN CHAMBERLAIN: May I ask the right hon. Gentleman a question for the sake of making the matter perfectly clear? I understand that, if an American be appointed as a member of the Commission—that is the first alternative with which this paragraph deals—he would, for the particular purposes for which he is appointed, and those only, speak and vote as a member of the Commission, so that his vote would not necessarily be a decisive vote. He might be in a minority of one against the whole Commission. On the other hand, if an American be not appointed to the Commission under the first alternative, then the Agent-General is to be called in. The Prime Minister has twice used language that is not in this Paper—"as an arbitrator." Does that mean that, if there be a disagreement among the members of the Commission—if they are equally divided, or if they are three to one—the American comes in as an arbitrator, and his award is binding on all parties?

The PRIME MINISTER: As far as the document is concerned, the wording was left purposely vague, for final decision in connection with future consultation with the financial experts as to the nature of the guarantee that would be required.
This comes up at the London Conference and the settlement will have to take place there. The point is this; The gradation—I quite undestand how it might be represented—the gradation is this: You are out for a satisfactory security for the creditors. That is the point. The minimum, the least change, would be an American on the Reparation Commission, with power to speak and power to vote when default was under consideration. Will that meet the creditors? Will that produce the £40,000,000? It may, or it may not. Supposing it does not, could we go a little step further, retaining, on the one hand, the Reparation Commission, at any rate as an effective organ in the decision, and yet going so far beyond the first proposal that it might just mean the difference between acceptance or repection by the would-be creditors and the financiers. The second suggestion comes in then, stronger than the first suggestion, and the purpose of the paragraph, as I am sure it is not necessary to explain to the right hon. Gentleman, is to indicate, so to speak, the line of thought and the line of exploration that would be pursued la London, and at the same time to indicate that such a line of exploration could be pursued without necessarily doing injury to French suspicions and violating French feelings too much.
That is the situation perfectly candidly. Then there is the other point—receipts and distribution. Will the Spa Agreement be reconsidered in London? No, certainly not. Then the other point was: Do we propose that a programme of sanctions should be settled now or immediately, or will we content ourselves by making a declaration of united interest in default in the event of our coming to an agreement? After coming to an agreement on all these points, will we then consider a programme of sanctions, or will we simply make a solemn declaration of union in interests, and then, in the event of default, meeting to consider what is the best thing to do in order to prevent it? The programme of sanctions can only be devised when you see in what circumstances the default has taken place. I know that some sections—perhaps I had better not specify closer than that—press me very much for a programme of sanctions, but the final and complete reply to an immediate pro-
gramme of sanction is this: If they were published next week or the week after, what is the effect? It only means that that is giving to Germany a warning how, in the event of default, we are going to punish her. Nobody but a foolish person would ever think of doing anything like that.

Mr. PRINGLE: Do we never put a penalty in a Statute?

The PRIME MINISTER: This would not be a Statute; this would be an agreement. But the fact is, as I have said, that there is to be no programme of sanctions, but a united declaration in the event of an agreement. Always provided that there is an agreement, there will be a united declaration of common interest in seeing that responsibilities undertaken by Germany shall be fulfilled by Germany. There were two questions to which the right hon. Gentleman the Member for Paisley referred, upon which I think I had better say next to nothing to-day. They were both with reference to security. There were two observations regarding security, and, if I may say so, the line which the right hon. Gentleman took this afternoon is precisely the line that I have been taking all through. On one of the last occasions when I spoke here I anticipated that by saying that the only profitable line of thought, so far as I could see, was through the League of Nations. The pact, if you can call it such, cannot be a bi-lateral fact; it must be a general one. It must be a pooled security. As a great French military authority said to me the other day, "The British Government is perfectly right; the problem of French security is not a problem of French security. The problem of French security is the problem of European peace." I have done what I could to open up the way to get to it, and all I can hope is that the Conference which will begin on Wednesday will be regarded as a golden, and, maybe, not recurrent, opportunity, not only for the Allies to unite once more, but for them to reunite on the work of pacifying Europe.

Brigadier-General SPEARS: The international situation has undoubtedly had a rough passage lately. Our thanks are due to the Prime Minister for the energy he has displayed in endeavouring to put matters straight.
I cannot help saying, however, that I believe the Chequers interview will go down to history as a supreme instance of two Prime Ministers absolutely misunderstanding each other's point of view, and whilst being firmly convinced that they saw eye to eye. In fact, to use the Prime Minister's own lucid phrase, it is a magnificent example of a misunderstanding, which, if it was a misunderstanding, was purely a misunderstanding. I should like, although the question of the evacuation of occupied territories has been raised, to put a specific question concerning the evacuation of the Cologne bridgehead, which, under Article 429 of the Treaty of Versailles, we are bound to evacuate next January. I understand that, according to competent authorities, according to the terms of the Treaty of Versailles, a zone which has once been evacuated cannot be re-occupied unless a fresh default has been declared by the Reparations Commission. If that is the case, and if that is the view accepted by the Government, it means that if we evacuate the Cologne bridgehead it cannot be re-occupied by the French unless meanwhile a new default has been declared. Under these circumstances, what would be the position of the French troops, if there are any left in the Ruhr at that period? It is clearly impossible to imagine that these troops could be left there with their lines of communication undefended. I should very much like to know what the answer of the Government is concerning this particularly important matter.
There has been a great deal of talk lately about the Versailles Treaty. I think this House is entitled to know what the Prime Minister's view is concerning the Treaty of Versailles. In the French version of the Joint Communique the following sentences appear in paragraph 2:
Furthermore, the violation of the provisions of the Treaty of Versailles would destroy both the basis on which a permanent peace has been so painfully built up and the confidence in the solemn undertakings of nations, and would be of a nature not to prevent but to foster future conflicts.
Does the Prime Minister, or does he not, accept this view of the Treaty? It is important that we should know, as he has so often expressed his views in an exactly contrary sense. For instance, in an article which he wrote in the "New Leader" on 27th July last year, he used
words which were phrase for phrase an exact contradiction of the sentences in the communique quoted above. He wrote:
So long as the Treaty of Versailles lasts, with all its vindictiveness and injustice, peace in Europe will be precarious.
Again at the Labour Party Conference in 1923, he moved a Resolution demanding a world conference, including Germany, to be called to revise the Treaties of Peace. The same demand was made in the Labour party's manifesto at the Election in 1923. The House is entitled to know what the Prime Minister's views are now concerning this important matter.
I regret that the Prime Minister did not answer one particularly important question which had been put to him concerning the date at which, in the opinion of the Government., occupation under the Treaty of Versailles begins.
We have had a lot from the Prime Minister as to the importance in his view of the question of French security, but I think he most completely misunderstood the situation until a very short time ago. For instance, he told us that he was going to solve all these important problems piece-meal. He made it clear in his speech on the Consolidated Fund Bill on 1st March of last year that he wanted only to deal with the question of reparations, and that all other matters should be pushed far away into the background until that had been settled. He said:
His Majesty's Government decline to enter into any detailed exploration of the problem of security until it has first had an opportunity of exploring and settling the question of reparations.''
Again, specifically in the invitations sent to Italy and Belgium to the forthcoming Conference, it was stated:
Such questions as security and inter-Allied debts are to be explicitly excluded.
That was said last week, and to-day the right hon. Gentleman told us what great importance he attached to this very question of security. He has undergone a complete conversion. Of course it is quite true that you can only actually deal with one subject at a time, but before selecting the problem with which you are going to deal in detail, it is essential to decide on the broad lines of the frame within which you are going to build up your general settlement. So complete has been the Prime Minister's misunder-
standing of the French mentality in this matter that he has told us over and over again that the problem of French security could be indefinitely postponed. I am stating nothing new when I say the problem of French security has been absolutely fundamental in the French mind since the peace. The Treaty of Versailles, from their point of view, was built on the solid foundation of a treaty of military assistance guaranteed her by Great Britain and the United States. France in the first instance had considered it absolutely essential to maintain an army on the Rhine, and she only bartered this positive guarantee in exchange for a promise of military assistance by America and England. When this guarantee lapsed, owing to the refusal of America to ratify it, the whole structure of the Treaty from their point of view became undermined; cracks in the edifice became everywhere apparent, and they have been striving ever since to patch up these cracks. The guarantee that had been promised them having been withdrawn, they have endeavoured to obtain security by other means, and this has led them to enter into arrangements with other European nations, arrangements which have proved so distasteful to opinion in this country, and which even to the French themselves has never given them a sensation of having obtained the equivalent security to that which they lost when the pact lapsed. This need for security has had a profound psychological effect on the French nation, so that very often when dealing with matters far removed from questions of security, reparations, for instance, they have more or less unconsciously endeavoured to twist the matter in hand into something that would satisfy their need. To many people in this country it has appeared as if France were deliberately provoking what she feared most, that is a spirit of revauche on the part of Germany. To many it has even seemed as if the French were impregnated with the spirit of militarism, and, in fact, the Prime Minister himself seems to have held this view. I wish he were here to listen to this. He said, in a speech reported in the "Daily Herald" of 16th July, 1923
France pursues this bitter policy to crush Germany, not because it is afraid that Germany may pick a quarrel and invade it,
but because it wishes no possible rival to its policy to dominate the European Continent.
I submit that this shows a profound misunderstanding of both French psychology and of the European situation. Of course, many people here and many French people also have felt that the holding down of Germany in a nervous grip was hound ultimately to lead to an explosion of which France herself would be the victim. To the extremist elements in France, however, this stranglehold has appeared to be an absolute necessity, and they have seen no other way but to hold Germany down until something else should turn up, until they saw a way out. But, strange as it may seem to many people in this country, although it may even seem an absolute contradiction, I know it is true that the French nation are profoundly pacific, and I myself would be prepared to stake my life on that assertion. If it had been understood by the Government how important the question of French security is, that question would have been discussed long ere now. To have given France security would have been the first step. But the right hen Gentleman completely separated the question of security and reparations and gave reparations precedence. In this connection it is very significant to note that M. Herriot, in his recent very fine speech in the Senate, in which he so admirably expressed the French point of view, declared that the question of security was far more serious than that of reparations. In fact, in his own words:
Before knowing whether we shall live rich or poor, it is necessary to know whether we shall live at all.
I am delighted to think that a French Prime Minister has at last been found who has had the courage to make a statement of which all were convinced, yet which none hitherto have dared to utter The Prime Minister has evidently seen that he has made a serious mistake in his estimate of the importance of security, for we are now told it is going to be discussed from now on until a definite solution has been reached, and it is a thousand pities that he did not come to this conclusion a very long time ago, because he might have avoided putting forward in the language he did those suggestions which were put forward in the invitations to the Conference, suggestions which caused so much suspicion in France. Had
he realised how nervous the French are concerning the. Treaty of Versailles as clearly a few days ago as he seems to realise it now, he certainly would not have used the language he did in the invitations to the Conference, and the result has been that he has had to concede infinitely more than he otherwise would have had to concede had he understood the situation more clearly.
A certain amount has been said about secret diplomacy, and I wish to add my voice to that of others in saying it appears as if the extreme unwillingness of the Prime Minister to keep the public informed has greatly added to his difficulties, and this is all the more strange in view of his past utterances, before he was as in office, on this subject. This is what he wrote concerning secret diplomacy last year in the "New Leader" (August, 1923). He also talks about the Foreign Office, and he seems to have been as much in favour of open diplomacy then as he was opposed to the methods of the Foreign Office which he now champions. Referring I c secret diplomacy he writes:
The Labour party are determined to change completely the method of conducting business with other nations. We propose to end the bureaucracy of the Foreign Office, with its queer mentality and subversive selection of agents, with its work in secret rooms and by strange people, for all the world as though it were some pursuit of alchemy conducted by mystic signs at astral times and by people selected by fate. We believe that the light and air of publicity would have a healthy and beneficial influence upon international relations.
But in spite of this spirited declaration in favour of open diplomacy, our experience so far of the Prime Minister's idea of doing away with secret diplomacy seems to be merely that he himself should know the secret. Many of the discrepancies between the Chequers Communique and the Paris Communique have been dealt with fully by the right hon. Gentlemen who spoke before me, and the most important points in this connection have been very clearly set forth by them.
But there is one particularly important point I wish to emphasise, and that is in the question of action to be taken by the Allies when a German default has been declared. The position now is that France has reserved to herself absolutely the right to act alone in case of German
default and impose what sanctions she may think fit. That is an all important matter for this country and unless that matter can be solved amicably we shall never get anybody to lend money under these conditions. M. Herriot, perfectly honestly, made a statement to the Senate that in the case of a German default having been declared France would reserve to herself complete liberty of action. I am a great admirer of Mi. Herriot, and so long as he is in power I feel sure that he would never think of taking isolated action, but how long will he remain in power, and what guarantee have we that another French Government will be of his way of thinking and would pursue his policy? What guarantee have we that we might not then have the Ruhr business all over again? What would the position of the bondholders be in that case?
There is another point which has not been raised so far to-day, and it appears to me to be an extremely curious one. It is really extraordinary and quite incomprehensible that the joint communique is apparently considered of so binding a nature that it calls for juridical interpretation of its clauses. That is all the more extraordinary in view of the trouble that the Prime Minister took last week to explain, concerning the suggestions for the Conference sent out with the invitations that he
was most anxious to avoid in any way giving the impression that matters have been in the slightest degree settled beforehand between M. Herriot and himself without previous consultation with the Allies,
and that
no engagements of any kind have been entered into between them or even suggested.
The point in connection with the communique to which I attach particular importance is the elect that it is likely to have in Germany and the United States. I have never posed as a champion of Germany. I am very anxious that Germany should pay everything that she can pay, but the fact remains that the Dawes Report has been built up on the provision that it is workable only if it is willingly agreed to and willingly worked by all parties. The German Government fought the elections on the programme of acceptance of the Dawes Report and endeavoured to get support in Germany by pointing out that
there was to be a new spirit inaugurated by the Report in the matter of reparations. That this new spirit was accepted by the British Government was made clear to the world and to the whole of Germany by the fact that the correspondence after the Chequers Conference has been published and by the tone of that correspondence. I very much fear that the confidence laboriously built up by the German Government in the Dawes Report will completely disappear in view of the new situation which the text of the Paris communique reveals, and the result may well be that Germany will not accept an arrangement substituting for an agreed settlement an imposed settlement agreed upon between France and England in which the French view so largely predominates. If Germany accepts, but only under protest, the result as foreseen by the authors of the Dawes Report itself may well be that the scheme will be killed. The Government must be aware that as a result of the Paris communique the Nationalist forces in Germany and the reactionary elements in Germany have been enormously strengthened, and that the Government majority in favour of the Dawes Report has been seriously endangered. I do not protest against the Prime Minister having made concessions to the French point of view—you cannot avoid making concessions—but I do object to his having made concessions on absolutely vital matters, which may very well have the effect of endangering the whole of the Dawes Report.
A good deal has been said as to the appointment of an American representative on the Reparation Commission. An important fact as was pointed out by the Prime Minister is, that it will require an Act of Congress to enable an American to be appointed officially on the Reparation Commission. America cannot even be officially a party to the nomination of a representative. On the other hand, I believe there is nothing in the world to prevent any individual, American or Chinese or any one else being appointed by the Reparation Commission itself so that it is quite possible for an unofficial American representative to be added to the Commission and that he could vote. The point is will the American investors accept that as an adequate safeguard for their interests? If they accept that and are to raise huge sums of money, are they going to allow these huge sums to be
placed at the mercy of a body of which they are not officialy represented, a body which is in the extraordinary position of being looked upon as a deity in France and a devil incarnate in Germany and in certain quarters in this country?
As for the alternative suggestion that in cases of differences on the Reparation Commission the agent for reparations payment should be called in as arbitrator, I do not see how that can be seriously meant. This high official might have to be a complainant to the Reparation Commission in case of default by Germany, so that if he is to be the arbitrator it would mean that he would be judge, jury and plaintiff all in one. That is clearly an impossibility, and I do not believe that the suggestion can be seriously meant. I was extremely glad to hear the Leader of the Opposition make a suggestion for the appointment of an independent and impartial body similar in character to the Experts Committee, which would report a German default to the Reparation Commission. That suggestion has been made upon previous occasions; I put it forward myself publicly some weeks ago, and it is very much to be regretted that the Government did not see fit to accept it. I cannot believe myself that the Government are not fully aware that the plan put forward in Paris is doomed to failure. Is it their policy to get the Conference started and then to hope that the pressure of events will prove to the French that their suggestions put forward in Paris are of such a nature that money cannot be raised if they are insisted upon, and that such an atmosphere will be created and such pressure will be brought upon the delegates that point by point they will concede back again those points that have had to be given away? That may or may not be a wise policy, but it appears to me to be a most dangerous one and one which may very well jeopardise the Dawes Report which we are all so anxious to see put in operation at the earliest possible moment.

Sir FREDRIC WISE: I do not propose to follow the hon. Member for Loughborough (Brigadier-General Spears) who has just spoken, because he has more or less dealt with the military and security side in connection with the Dawes Report. I propose to deal more or less with the financial side, and I hope that any-
thing that I say will not be interpreted wrongly. I am a friend of France, and I am anxious that every penny that is possible should be got out of the enemy. We should thank the experts for their Report, which must have entailed hard work and very complicated work. International European finance is, indeed, a riddle. The more it is looked into the more difficult it appears to become. The point I want to put before the Committee is whether the Dawes Report is possible or whether it is impossible. Having studied it and looked into it most thoroughly, I contend that the Dawes Report is impossible. Perhaps I may be allowed to go back to what happened after the wars of 100 years ago, the wars between 1793 and 1815. At the end of 1815 this country was owed a big amount for those days, namely, £58,000,000. The largest debtor was Austria to the amount of £20,000,000. In 1823 we settled the Austrian debt for an amount of £2,500,000. Austria was the only country able to pay and the amount being £2,500,000, and she paid this by drawing hills on London, and those bills were discounted in the usual way.
Perhaps the Committee will forgive me if I give a little personal information regarding my experience in connection with reparations. I believe I was the first person to make a. Report to the Peace Conference on the financial and economic situation in Germany in March, 1919. I presented my report in April, 1919, but that Report was, more or less, not carried out or, I believe, considered. I suggested a moratorium, and I still contend that a moratorium is necessary. I suggested that at that time what was called the migration of securities had started and that Germans were sending their money abroad so as to he protected if disaster occurred and something should he done to stop this increasing. I also suggested, and perhaps the Under-Secretary for Foreign Affairs will bring this to the notice of the Prime Minister, that the Germans should enter the League of Nations, and I took a letter to the Peace Conference from the President of the German Republic, President Ebert, asking that they should be allowed to join the League of Nations. In reply to the hon. and gallant Member for Henley last week the Prime Minister stated that no application had been made
by Germany to join the League of Nations. The application I refer to was not actually made to the League of Nations, but it was made to the Peace Conference. I am sure that. Germany is most anxious to join the League and it would be much better that she should be a member, because the Allies should have more control over her if she joined the League.
I also stipulated that Germany in regard to Reparations could pay between £1,000,000,000 and £2,000,000,000, subject to inflation, but that the main thing to do with regard to Germany was to give that country hope. That was in 1919. Then came the Treaty of Versailles. I was told that the original figures that were discussed was about £26,000,000,000, but eventually there was another figure considered at Versailles. It was generally thought that Germany could pay £11,000,000,000 and that, at any rate, £1,000,000,000 could be paid by May, 1921. That was quite impossible, considering what we had taken from Germany, and taken in a natural and right way. We took Alsace and Lorraine, we took the Saar coal for 15 years, we took her colonies, we took 75 per cent. of her iron ore, 34 per cent. of her hard coal, and 20 per cent. of her potash. [HON. MEMBERS: "Ships"!] I will throw in the Mercantile Marine as well. My main point is that no country could possibly pay £1,000,000,000 within two years after the signing of the Peace Treaty. There were many Conferences. I always welcome Conferences, because you get to know the people better. It is the only way in which international policies can be carried out by means of Conference.

Lieut.-Colonel J. WARD: They never do that.

6.0 P.M.

Sir F. WISE: I am afraid they do. Take the Treaty made in May, 1921. The Pact of London settled the figure of £6,600,000,000 to be paid by Germany. That figure is before us now. Until some reasonable figure is settled in regard to reparations, the Dawes Report or any other Report can hardly be carried through, except as a temporary measure. What has Germany paid? Up to the end of last December Germany has paid £421,000,000 to the Allies. All that has been paid by inflation. It has not cost Germany a
penny. It is simply the foreigners, ourselves included, buying the marks which enabled Germany to pay this large amount. But I want the Committee to realise that it has not cost Germany anything.

Mr. MOREL: When my hon. Friend says that, does he suggest that the middle classes in Germany, who have been very largely ruined by inflation, have not paid a very large portion of that money?

Sir F. WISE: Of course, the middle classes and the credit of Germany are absolutely in default, or practically in default, hut it has cost the German nation nothing. There is a very great difference between the people and the nation. Coming now to the Dawes Report, it is required because of the breakdown—which I think the Prime Minister agreed to—of the Reparation Commission. The terms of reference of the Dawes Committee were
to consider the means of balancing the Budget, and the measures to be taken to stabilise the currency.
It did not touch the actual amount which Germany had to pay at all. That is what I want the Committee to realise, and even the amounts suggested, though there is no given large amount, and there is no period, to me appear to be quite impossible.
In the first year £50,000,000 has to be paid, of which £40,000,000 is the loan, the loan to which the Prime Minister referred. Where it is coming from I cannot conceive. Our total of foreign investments last year was £96,000,000, which is a large sum. How much are we going to subscribe to this loan? Last year we overinvested abroad. Are we going to advance half this amount to Germany quite apart from the security? The security probably is more important than the actual amount. In five years the amount is £125,000,000 a year and has to be paid by Germany, which is a minimum amount and not a maximum, and, as I said before, it does not even refer to the period. May I take two points. One is the ability of Germany to pay, and the second is inflation. The most important thing is for Germany to balance her Budget. It is estimated that this year the revenue will be £263,000,000, and the expenditure £253,000,000, so that there will be a balance of £10,000,000.
How can that be increased? That can be increased by taxation, and anyone who refers to the Reparation Report will find in Section 1 General Provision (231 to 244) that taxation has to be on the same basis as, or a greater basis than, the taxation of the Allies, and part of the Section states that Germany is required to pay for, and make as a charge upon her revenues prior to that service or discharge of any domestic loan, and secondly, so as to satisfy itself that in general the German scheme of taxation is fully as heavy proportionately as that of any of the Powers represented on the Commission. That provision has not been carried out so far. It was in the Treaty of Versailles, but I suppose that the inflation has been so great that it has been impossible to tax the Germans in the same way or in the same proportion as the Britisher or the Allies.
There is only one fund out of which this large amount can be paid. First of all, you must have the maximum revenue and minimum expenditure. The production must be greater than the consumption, but to pay any reparation you must have your exports greater than your imports. Looking at the position from this point of view, we find that from the let January to the 1st June the imports into Germany exceeded the exports by 1,308,000,000 gold marks. That does not look as if Germany will be in a position to pay even £10,000,000 this year. The transfer of money from one country to another is one of the most difficult things to accomplish. It is only an expert that really understands it. Some Members of the Committee may ask what happened in pre-war days. In pre-war days we were on a gold standard, and the franc only varied between 25.12 and 25.33, and the dollar only varied between 4.82 and 4.89, and if it went any way beyond that or even reached that, gold was shipped or taken back and the exchange righted itself. To-day we have not got that and it makes the transference of money all the more difficult.
People do not seem to realise that when they talk of £125,000,000 a year for reparations in five years. You may say that the debt to the United States is being paid by the British, and so it is, but it is a difficult thing to do, and the only way in which we can keep up the payments is by the Empire being the
largest producer of gold in the world. We buy the gold in London and ship it across to the United States. That is one of the ways in which we pay our debt to America. We hear people say, "But what about the French debt to Germany after the Franco-German war?' You cannot compare these reparations with reparations after the Franco-German war, because that was not a world war, and France was able to borrow outside. Take the case of the Chinese-Japanese war. An indemnity of £34,500,000 was imposed upon China. She came and borrowed in the European market and she was able to do it. In the case of a world war it is almost impossible to borrow outside unless you have some agreement with all the Powers.
On the other point as regards inflation, the Committee must realise that there is practically no national debt in Germany and, what is very important, that the industries and most of the railways have no debt at all. The gold value of German currency is £2,000,000. I was reading a speech by a shipowner, made recently, which I may quote, as it is somewhat important. He said:
Ninety-one well-known British shipping companies, owning altogether 7,030,000 tons of shipping, have a liability on debentures and loans of £41,000,000, or nearly £6 a ton. The fall of the mark has relieved German shipowners of a capital liability of £18,000,000 on the 6,000,000 tons of shipping in Germany.
How are we to get over it? I am sure that one thing which we want is fair trade on the Continent, and I sincerely hope that the Prime Minister will have time to consider the suggestion that we should insist on Germany having the same internal debt as we have. This is besides the external debt. That debt would be guaranteed by the industrial and commercial firms in Germany, and coupons would be handed to the gold bank, but not cashed into foreign currency. If they were cashed you would return to inflation, but you always have the debt there, and the industries mortgaged in the same way and to the same extent as our industries. I hope sincerely that the Under-Secretary of State for Foreign Affairs will be kind enough to pass that suggestion on to the Prime Minister in the hope that there may be something in it, because if we have unfair trading, as referred to by the ex-Prime Minister, it is going to hit our
industries and we shall have more unemployment than ever. Can the Dawes Report be carried into effect? I have here a little note by Colonel Ayres who served as technical adviser to the American members of the Dawes Committee. He is a very important man, and I agree entirely with what he states. He says:
The new plan is a great advance over anything previously done, and it might be briefly characterised as a good plan, but the figures are really too large. I would say that the contemplated payments are too great, and that the plan, will break down if it is not amended.
Those are entirely my views. I feel that it is not a business plan in the ordinary sense. The experts, I think, have not realised the heavy burdens of Germany, and the great difficulty of transferring money from one country to another. I hope sincerely that before long, even if this goes through as a temporary measure, we shall have a conference not only of the Dawes experts but with the Reparation Commission and the Allied debtors, with America assisting in it. You cannot divorce one part of this from the other. It is all dependent on the whole, and it is on that whole that Europe depends for peace, permanent peace, peace with security.

Mr. T. JOHNSTON: we have heard this afternoon certain speakers speaking from different sides of the House, who have given us their opinions as to how much Germany can pay, and that is the purpose of the Dawes Report. But I want to put another point of view. The point of view of the British working class as to how much Britain can afford to receive, and in what shape can we possibly take reparations at all. As I read the Report, pages 34 and 35, there is only one way of receiving reparations. The Dawes Committee say:
While, therefore, we recognise the necessity for the continuance of deliveries in kind, we think that unless they can be confined to natural products of Germany, such as those specifically dealt with in the Treaty, coal, coke, iron, dyestuffs, etc., and in the second place to exports which do not entail the previous importation into Germany of a large percentage of their value, they tend to be uneconomic in time.
Coal, coke, dyestuffs. We have tried them all, and every attempt to take coal, coke or dyestuffs as reparation in this country has resulted in a huge increase in our unemployment figure. Let me
endeavour to show that this is not a wild heresy of mine, but that it was two years ago the considered opinion of the leaders in British trade and industry. Take the right hon. Gentleman the Member for Paisley (Mr. Asquith), leader of the Liberal party, who spoke in this House this afternoon. In a speech at Tonbridge, on 26th October, 1921, he said:
Germany ought to be made to pay for the wanton injury she inflicted on her enemies and the world. She ought in justice to be made to pay, but it does far more harm to receive than to give.
He said later:
Germany cannot pay in depreciated marks, which are worth nothing; she cannot pay in promissory notes; she cannot pay in services, for you have taken away her mercantile marine. The only way Germany can pay is by the export to the indemnified countries of German goods.
That means the importation into this country of goods for which we are not called upon to make exports of equivalent value. In other words, our markets are to be flooded, and our working class is to be thrown out of employment. The Glasgow Chamber of Commerce Journal, of February, 1921, said:
We cannot have a large importation of free goods without jeopardising the labour position.
The "Money Market Review" of 5th March, 1921, said:
The German indemnity is a will-o'-the-wisp. It is not a case of heads I win and tails you lose, but rather of heads I lose and tails you lose also.
The right hon. Gentleman the Leader of the Liberal party, speaking at Paisley on 2nd June, 1921, said:
The indemnity ships have paralysed our shipping industry, while the German yards are busy.
I have a quotation here from Mr. Runciman, who was at one time the President of the Board of Trade and who certainly knows something about shipping. He said at West Hartlepool, on 25th January, 1922:
What gave the shipping industry the knock-out blow was the payment of the German indemnity in ships.
The financial advisers to the Government, Messrs. Samuel Montague & Co., have declared that—
The diversion of German indemnity coal to France has spoiled our market in that country.
The then Chairman of the National Industrial Council, Sir Oswald Stoll,
declared in March, 1921, that the German indemnity coal to France had put 100,000 British colliers out of work. Mr. Arthur Chamberlain, the Chairman of Tube Investments, Limited, speaking at the annual meeting of that company in Birmingham in 1921, said:
The chief, I had almost said the only, thing that we can do to help the situation, is to reduce the amount that Germany owes to us, which we can do by cancelling her indemnity, and, so long as there is any unemployment or under-production in the country, every sovereign's worth of goods we receive as indemnity from Germany is a less to our workpeople of the amount of labour that Germany has put in to produce it.
I could go on for half an hour with quotations, but I do not see that there is any necessity to do so. Let me, however, give a, quotation from the "Manchester Guardian" of 29th September, 1921:
The reparations from Germany seem at last to be coining in merrily. The payment of huge reparations by Germany has to mean a huge, steady, long-lasting flood of German goods of all descriptions into France, Belgium and England. All that the naked eye would see in our ports, markets and shops would be that extraordinary inundation of everything that Germans make and sell. The inundation has begun. With some excitement, people are remarking that in August there was an upward jump in almost all sorts of German imports to Great Britain. The value of the German iron and steel received rose by £73,000, that of dyes and dyestuffs by £37,000. We took £36,000 of reparation in toys—nearly double the haul we made in July. We made Germany pay up clocks, knives, stationery, chemicals, lamp chimneys and scissors far more briskly than in any previous month.
Then the "Manchester Guardian" pointed out that, coincident with this importation of goods, the statistics of British unemployment were steadily rising. What is it that the Dawes Committee propose to do? They do not discuss how we shall be able to absorb reparations goods, but they say that Germany's capacity to pay is somewhere in the neighbourhood of £125,000,000 a year. The problem for us is not Germany's capacity to pay, but our capacity to receive. Can we take coal without throwing our miners out of work? No. Can we take dyes? No. Can we take anything?

Mr. A. M. SAMUEL: Manufactured goods.

Mr. JOHNSTON: Can we take any kind of manufactured goods for which we
shall not be called upon normally to manufacture goods in payment, without at the same time sending our own workmen, who are making these goods for export now, out into the streets among the unemployed?

Mr. SAMUEL: I quite agree. The hon. Gentleman should remind his leaders of what was said by them at the last General Election.

Mr. JOHNSTON: What our leaders said or did not say is not for the moment under discussion. Does the hon. Member agree with me? If he agrees with me, he will not support the Dawes Report.

Mr. SAMUEL: I have come here to condemn it, if I should be called upon.

Mr. JOHNSTON: Come over here, then. At any rate, it was the political party with which the hon. Member has been associated that stumped the country in the 1918 Election and secured a Jingo verdict on the basis of making Germany pay the uttermost 6d. that could be extracted from her pockets, and secured a political triumph which, as we have learned since, they knew in their heart of hearts they could not honour. That was a dishonest operation, and if the hon. Gentleman wants to talk about political dishonesty he should turn his attention to the manifesto and the speeches of leaders of the Coalition party in 1918. If, as now appears, we are to have a considerable amount of support in this House for the view that the taking of reparations hurts the receiving nation more than the giving nation, we shall be entering upon a new phase in the discussion. There is the position of America. I know that it is argued that there is something wrong in this theory, because America is prosperous after having taken the British debt. I dispute that entirely. I believe that within a very short time it will be found that this payment of gold to America will so raise prices in the United States that it will be impossible for American goods to compete with European goods in the markets of the world. If civilised nations are coming to the conclusion that you cannot extract wealth from another nation without doing irreparable injury to your own working classes, then we are arriving at an entirely new point of view in international affairs. That was certainly discovered by Bismarck after the
Franco-Prussian War Germany took about £200,000,000, but so grievous were the results to Germany that it was actually proposed in the German Reichstag that the £200,000,000 should be returned to France. A statement was made by the leader of one of the political parties in the French Chamber that he for his part would on no account have a return of the poisoned millions. After the Russo-Japanese War the Japanese economists recommended their Government not to take an indemnity.
I submit that if the leaders of all parties in this House, instead of wasting their time upon dummy and useless reports like this—if it is agreed to next week by all the European Powers they cannot operate it—if instead of wasting time discussing agreements about these reports and any other reports for the dumping of indemnity goods, we could sit down and make up our minds, first of all, whether or not it is possible to take any indemnity goods without injury to the British people, and if we discovered that we cannot so take indemnity goods, then honestly and straightly let us tell the British people that we are out to cancel all these indemnities, and let us see if by so doing we can set European trade firmly upon its feet again, and recognise that the only way by which we can become prosperous is by allowing our customers to become prosperous, and not by the process of endeavouring to crush them in the mire. I trust that before this discussion is ended to-night some hon. Member better qualified than I am to give a lead in this House, will boldly say that the attitude taken up by, and the recommendations of, the various political parties in 1918 and subsequently, were wrong and short-sighted, that they meant suicide for the working class of this country, and that We propose henceforth to explore new methods for settling the affairs of Europe. If that be done, we shall be doing a very much better day's work for the working class and all classes in this country than we shall be doing by continuing barren discussion of useless subjects such as this.

Mr. AUSTEN CHAMBERLAIN: The point of view which has just been expressed by the hon. Member opposite is one which I have heard put before in this House and which, I confess, even by
repetition has not become more easy of acceptance by me. What is the hypothesis from which the hon. Gentleman proceeds? It is that for a nation burdened with debt like ourselves, involving the heaviest taxation on all classes of the community and, in particular, on our trade and industry, it is an advantage to set our most powerful pre-War competitor going again, without any debts of any kind, external or internal, and with the past capital charges on their undertakings wiped out. He doubts whether it is worth America's while to receive the interest on our debt. He is confident that if we continue to ship gold there prices must rise. We do not pay our debt only by shipping gold, or mainly by shipping gold, and these confident expectations of a rise in prices may perhaps be a little modified if the hon. Member examines what is actually taking place. No doubt there was a rise up to a certain point, but the Americans have found a not ineffective method of "sterilising" to a very great extent the additional gold which they receive. I should agree with the hon. Member that the possession of so much gold is of no value whatever to America, and might easily become an incumbrance, but I cannot agree with the hon. Member that it is an advantage to us to have to pay this debt and that really the more you can increase your obligations to pay to a foreign debtor the more flourishing you are.

Mr. T. JOHNSTON: I did not say that.

Mr. CHAMBERLAIN: I certainly do not wish to misinterpret the hon. Member, but I cannot see any other logical conclusion to his argument. He says we must not take any reparations, because it is a disadvantage to us to do so. Is not the converse true that if we have a debt to pay it is an advantage to us, and that the less we receive and the more we pay the better we are? I do not wonder that when we get to the end of this argument, to its logical conclusion, the hon. Member thinks I have misrepresented him.

Mr. DICKSON: Of course you have.

Mr. CHAMBERLAIN: I hope the next time the hon. Member speaks, he will show how he can evade that logical conclusion from the premises which be laid down.

Mr. MOREL: rose—

Mr. CHAMBERLAIN: I am sorry I cannot give way. I gave way to the hon. Member whom I was criticising, as I think I was in duty bound to do, but the Prime Minister has been good enough to make a point of coming in to hear what I have to say, and I know the right hon. Gentleman has another engagement. It is to meet his convenience that I rise thus early in the Debate. May I begin by observing that I think the Prime Minister was unduly captious about the very gentle criticism administered by my right hon. Friend the Leader of the Opposition (Mr. Baldwin). After all, the right hon. Gentleman in his salad days, was pretty free with criticism himself. He had nothing but the most openly and bluntly expressed criticism either for the diplomacy of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) or for the diplomacy of my right hon. Friend the Leader of the Opposition. All these people had blundered inexpressibly and incomprehensibly. All that was needed was the arrival of a plain man of good will and common sense to put things right. Well, the plain man of good will arrived, and he found that already the situation had taken a favourable turn. The diplomatists, whom he had so roundly condemned, had secured the appointment of the Dawes Committee and American co-operation in it. That was done before he came into office. Before he met M. Herriot at Chequers, the Report of the Dawes Committee had been received and accepted by all the Allied Powers.
That is not all. I do not want to lay undue, and what in a foreigner would be improper, stress on the consequences of a change of Government in France and of the disappearance of one man and the arrival of another. I think these are matters which we had better leave to be discussed locally without our interference: but who will deny that in the course of the months which preceded the Chequers meeting, there had been a sensible detente in French feeling, a more open mind, a greater readiness to consider things and proposals which at one time had appeared a priori unacceptable? That was the situation when the Chequers meeting took place, and the first result of the Chequers meeting was to endanger all that had been won from the meeting
of the Dawes Committee onwards and very nearly to blow the whole concern to smithereens. Why was that? I do not want to be unduly critical, but I think the Opposition are entitled, if only for the avoidance of similar mistakes in future, to call attention to the errors that, were committed. I will not dwell upon them, but I will run through one or two of them.
In the first place, there was at Chequers, as I suspect, a great deal of loose talk without any precise definition about what any of it meant. This loose talk without definition was followed by a communiqué, which was very precise, but gave no explanation; and then the communiqué was followed by an invitation containing a whole series of propositions, and, when read in connection with the terms of the communiqué, nobody could avoid supposing that these proposals, put forward in the British invitation, were in fact proposals upon which "general agreement," or a "complete accord," as the case may be, had been reached at Chequers. It was not necessary to do that. It was not necessary to pretend in the communiqué that you had agreed to more than that a Conference should meet. It was not necessary in inviting the Conference to take pains to put down all the points on which you were most likely to differ from the French, instead of those on which you were most likely to agree, and it was not necessary, nor was it wise, to wrap the whole thing in an air of mystery which is only gradually being dispelled. If the Prime Minister on Monday last, instead of coming down here, and making a 50-minutes speech, which fogged us all, because he was fogged himself, had adopted the simpler process of reading one of these invitations, we should have known where we were, and perhaps his subsequent task might have been easier. Observe what the letter of invitation read with the communiqué—and the "general agreement" of the English phraseology was not confined to the meeting of the Conference, but applied to what was to take place—observe, how the letter of invitation, read with that communiqué, appeared to commit France, and to what extent. First place, it presented a solution.

The PRIME MINISTER: The first Chequers communiqué?

Mr. CHAMBERLAIN: Yes, the letter of invitation read with what I call the Chequers communiqué. What was included in the invitation? The letter presented a solution which, as my right hon. Friend the Leader of the Opposition said, the Prime Minister ought to have known would provoke immediate contradiction and disavowal. The Prime Minister says to my right hon. Friend: "Who are you to say this? Why, Mr. Bonar Law, in December and January, two years ago, did very much the same thing, and how does it lie in your mouth to blame me?" Why, for that very reason. It is not that the proposal was inherently unfair or absurd; it is that experience had shown that it was a proposal which no French Government would accept and which this French Government could not accept, and in the light of the previous experience, with all the knowledge spread out before him, the right hon. Gentleman repeats the error. I venture to submit that was a great and almost unpardonable blunder. He challenged the validity of the Treaty of Versailles: he repudiated the authority of the Reparation Commission, and he offered to Germany an excuse for boggling and haggling over the acceptance of the terms of the Dawes Committee.
As I say, the result was that the "complete accord" of Chequers disappeared in thin space. The Prime Minister hurriedly took the train to Paris and made a new agreement. Yes, but he had to pay a price; he has had to pay the price for claiming too much in the first instance. Just see what happened. In the first place, he re-establishes, and I am glad of it, the authority of the Versailles Treaty, not again to be questioned by any British Government. In the second place, he re-affirms and consolidates the authority of the Commission as interpreter of that Treaty in certain respects. In the third place, having first expressly separated Inter-Allied debts and security from the Conference, as a subject only to be taken up after the Conference and when we have agreed on the immediate problems of the Conference, he now has to agree that simultaneous conversations shall go on, not in the Conference—

The PRIME MINISTER: No, the only position I took up was that those two subjects should not be subjects of conversation in the Conference. As a matter of fact, conversations are open, but they will be detached absolutely from the Dawes Report.

Mr. CHAMBERLAIN: I think the result of the Paris agreement is to reattach them to the Conference. You may exclude them from the Council Chamber, but, if these conversations are going on at the same time, it is perfectly futile to tell me that the decision of the Powers, and of two Powers in particular, within the Conference will not be influenced by the progress, or the lack of progress, in the conversations outside the Conference on the subject of inter-Allied debts and securities. I think the right hon. Gentleman in some respects has revised his position for the better and taken up now a position which he ought to have taken up at first, but I think, in others, he has by the initial blunder tied his own hands to M. Herriot before they meet, and tied M. Herriot's hands to his Parliament before he comes to London. That is the point, and I think it is right and necessary to say so, but I also wish to say a word or two about the policy which my Friends and I would recommend to the consideration and attention of the Prime Minister for the future. After all, though it is perhaps not quite the time to accept the invitation of the Prime Minister to consider that all the acts of his Foreign Ministry up to the present, are the dead past, and may be left to bury themselves, we are more interested at the moment in the present and the future than we are in the past.
What is the policy which we would follow? In the first place, we would frankly accept and uphold the Versailles Treaty and its subsidiary or collateral Treaties as the basis, and the only possible basis, for the public law of Europe. In the second place, we would make the maintenance of the Entente with France the cardinal object of our policy. We would do that both to give confidence in the stability and the execution of the Treaties and to prevent fresh causes of difference arising between ourselves and our Allies. Let me say that, making that our aim—and so far, I think, I have not stated any policy which the Prime Minister would disavow—we
should feel with him that there was a similar obligation on the part of our Allies to make the maintenance of that Entente the cardinal article of their policy and to meet us in the spirit in which we were prepared to meet them. Thirdly, we should make the observance by Germany of her obligations a not less cardinal feature of our policy in foreign affairs, and, in return, if Germany frankly accepted and loyally fulfilled the obligations as now presented, we should be prepared to respect the integrity of Germany and to welcome her back into the comity of nations; and always, like His Majesty's Government and like every party in this House, we should seek to secure, wherever it be possible, associations with the United States of America in such ways and under such conditions as may at any moment alone be possible to the American people.
May I say one word about the methods which the right hon. Gentleman, or, rather, the two Governments, have suggested in their last joint communiqués? The first evidence of the favourable turn of events was the acceptance and creation of the Dawes Committee. In our conception, I will not call it the Dawes Committee, but a Dawes Committee, is not merely an expedient, but it is something in the nature of a policy, and I venture to suggest to the right hon. Gentleman that possibly another Dawes Committee, appointed by the Reparation Commission, acting under the Reparation Commission, advising the Reparation Commission, may be a more hopeful way of securing American association and of attaining the results that are desired than those that are actually embodied in his proposals. The merits of this policy are that they respect the Treaty, they respect the Reparation Commission, they hold out a hope of American association, and they thus introduce a moderating and harmonising influence into the councils of the Allies, so preventing friction, facilitating agreement, and rendering easier German acquiescence in the terms which she must be called upon to fulfil.
My right hon. Friend said a few words on the character of the Dawes recommendations as they should be viewed from the German standpoint. Was there ever in history, will there ever be again, victor nations who are ready to adopt a scheme
which begins with the feature of lending money to the vanquished, to set the vanquished on their legs? That is not incompatible with the Treaty; that is not a contradiction of the Treaty, but the Dawes conditions are an immense alleviation of the German position under the Treaty, and, if refused by Germany, if she hesitates to accept that offer, if she refuses them or shows bad faith in their execution, then, I think, we should be entitled to presume, and driven to presume, that she prefers bankruptcy and disaster to the fulfilment of the obligations she undertook or to making any reparation for the wrong which she has done. If that should come about, then I think all disagreements between France and ourselves would quickly be removed, for if we have differed as to means from time to time, if we have hesitated as to amount, we are as firmly determined as the French themselves that Germany shall respect her international obligations and, within the measure of her powers, now declared, not by the Allies, but by art impartial and an expert authority, shall make good the injury she did to civilisation.

Mr. ELLIS DAVIES: I wish to deal with the question of security. We are, of course, bound to the League of Nations, but the right hon. Member for Paisley (Mr. Asquith) suggested an association of nations outside or in addition to the Covenant of the League. There is no reason to think, however, that France would be satisfied, as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd-George), at Cannes, made an offer of a wider pact for France, but that offer was refused, and to-day we are urged by France to give a wider pact and to enter into greater liabilities. The first reason for that desire on the part of France, it is said, is that of fear, but fear is not confined to France. France is not the only country in Europe which fears. France can be attacked only from the East, but Germany lies between France and Russia, open to be attacked on both sides. Lord Bryce, for instance, in his last book called attention to the fact that "Russia and Germany each feared the other, each dreaded a sudden attack by the other," and, said he, "let us allow to Germany the benefit of that consideration. They were in real bona fide terror
of what Russia might do." But then comes the question: Is France really in fear? For my part, I question it, and I question it for this reason, that France knows quite well, and so does Belgium, that our self-interest will compel us to protect both France and Belgium in the future as we have done in the past. In a letter written by Lord Balfour to Lord Hardinge on the 4th July, 1922, he stated:
I observed that M. Poincaré's memorandum implied that the French now attach but little value to the Pact, for he was at pains to point out that, if either Belgium or France were attacked, Britain would, of necessity, and from motives of pure self-interest, be compelled to come to their assistance.
Not only that, but the French Prime Minister, in an interview later on with Lord Hardinge, said that in the form in which the pact was proposed by the right hon. Member for Carnarvon Boroughs,
it was not of capital interest to France, who well knew that Great Britain would be found at her side if she or Belgium were again attacked by Germany, since in the future, even more than in 1914, any attack against the French frontier would directly imperil the equilibrium of the world and the safety of Great Britain itself.
That is the view of French statesmen, but it is also the view expressed by the Belgian Foreign Minister, who said practically the same thing only a few days ago, that not on account of any treaty or of any pact, but for our own salvation, we should be compelled to defend her. What have we offered France? The then Prime Minister, at Cannes, offered the defence of their own soil from German aggression, but that was not satisfactory. Lord Curzon reported to Lord Hardinge on 5th December, 1921, that they "wanted an agreement by which we would render assistance in case of an indirect attack." By indirect attack, the French suggested that she might even be attacked by Russia attacking Poland, and that is a point of view which has been continually emphasised by the French representatives in Paris and here. What does it all mean? If a pact of that kind is entered into by us with France, does it not mean military conventions and agreements? They have made it clear that if such a pact is entered into they will require us to regulate our military strength in agreement with one another. Their complaint is that a pact or agreement is insufficient, because we may be late in
arriving with our troops in France, and I would like to put this point: What do the French mean? Do they mean that we should maintain an army on the Continent and be there at all times, or that we should contribute to the maintenance of French troops? It seems to me that we are entitled to have answers to those questions before we are again asked to offer them a pact.
My contention is that France really is not concerned about security and about protection. She is concerned with a policy that savours of Imperialism. What has been the policy of France? The policy of France at present can be defined by the desire of Marshal Foch to have one frontier on the Rhine. Let there be no illusion on that point. It has been the foreign policy of France for 200 years, it ended, first, at Blenheim and then at Waterloo, and I have little doubt in my own mind that the more information we get about the origin of the last war the more we shall find that the reason and the object of France was to make the Rhine her eastern frontier. What has been our policy? Our policy has never been based on sentiment; it has always been based on our interests. We entered into the Treaty with Belgium in 1839 because we were interested in protecting Belgium in order to protect ourselves. Let there be no illusion on that point either, and if anyone doubts it, the evidence will be found in a letter written by the King of the Belgians to Queen Victoria in 1838.
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In this he said that in our own interests we were bound to protect Belgium against any foreign Power. The Treaty of 1839, which had such terrible consequences in 1914, was not a matter of sentiment, but a matter of our own interests. Take, again, our attitude towards Germany. It was one of fear. Germany was a menace to our naval and military power. An hon. Member says, "Commercial." I prefer to put it higher and say it was a menace to our military and naval power. We defended Belgium. We fought Germany in our self-interest, and I am going to submit that the time has come when we should revert to the policy of a hundred years ago, the policy of the greatest Tory statesman of that period. I am referring to Canning, who, I venture to say, was also the greatest Foreign Secretary this
country has ever had. The policy of Mr. Canning was this, that we should look after our own interests, that we should defend our own interests, and enter into no obligations or alliances with those with whom we were not concerned. As he said:
I think more of England and less of Europe.
We should be ready at all times to throw the whole weight of the country, moral and material, according to the decision of this House, where we think it is most needed and most just.

Mr. T. DICKSON: The right hon. Gentleman opposite (Mr. A. Chamberlain) confessed himself somewhat confused at the logic of the hon. Member for West Stirling (Mr. T. Johnston) in that he expressed the view that indemnities and reparations could only be paid finally as expressed in goods and commodities, and that the receipt of those goods and commodities was not beneficial but the reverse to the workers of the country receiving them. It was somewhat amusing, at least to me as a mere back bencher, to hear from a right hon. Gentleman who looks upon foreign imports as something like the commodities of the devil, that goods coming in at nothing at all per ton are apparently very desirable things, but goods coming in a few pounds per ton cheaper than they could be produced in this country are apparently the worst possible thing a country could receive. That was exactly the issue before the country at the last election. Goods coming it a little cheaper than we can produce them here are something we ought to keep out, but goods coming in as reparations and indemnities and coming in at nothing per ton are apparently things desirable and are to put us on our feet. I suggest that a person who submits a double-barrelled case of that description has no right to quarrel with the logic of any Member in this House.
It seems to me that there has been too little said to-day from the point of view of the average working-class community. There has been a great deal of talk about the nation and about Britain and about France and Germany, but when I speak of Britain I think of the British people in the mass, and particularly those people who work for their living and produce the means whereby we live in this country. I want to submit this, that no indemnities
or reparations can be paid unless they are finally paid in some form of commodity which is to-day either paid for by similar labour expressed in goods exported abroad or is directly produced by labour employed in this country. We have mention in the Dawes Report, as an example of the goods that may be sent here, of coal, dyes, cocoa and so on. If I am in order in taking Protection as a simile, we find this curious analogy between the Protectionist case and the indemnity. We could make a splendid case for the protection of any particular industry in any particular area. I could go to a steel area and make a splendid case for the protection of steel. I could go to an engineering area and made a splendid case for the protection of engineering. It immediately follows that if I am going to protect every industry similarly, then their prices are going to rise. My illustration is this: You can make out a splendid case for one person, provided you do not tell him you are going to do the same thing for other persons.

Mr. BECKER: It would not be a splendid case.

Mr. DICKSON: That was the only case. I could go to the coal areas and get patriotic miners who have read the glowing, magnificent and lurid speeches of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and put the case to them: "Do you think Germany should pay?" and they would say, "Certainly." Remembering the speech of the right hon. Gentleman, that coal was the life-blood of industry, I would then tell them, "Coal is a vital thing, and we should get paid in coal." The miner would say: "Who are you trying to get at?" and I would say, "Why?" He sees, if indemnity coal comes in, he is going to get the sack. Then I go to the engineer who is in favour of indemnities and reparations, and he is in favour of getting them paid, but not in engineering. I go to Lancashire, and there see the so-called patriotic person who is in favour of indemnities and reparations but not in cotton. It comes to this, that everybody is in favour of indemnities and reparations provided always you get them in what someone else is producing and not in what he himself is producing. I agree that you cannot get indemnities
and reparations payable finally but in goods. There is no other way. Even in gold there is no other way.
If you are considering the receipt of indemnities, you can have them whereby one particular section of the community benefits, but it is certainly not the working class, because the only channel through which it can obtain a means of livelihood is employment, and if you are getting goods of any character into this country in the form c-f indemnity the essence of indemnity is that no goods shall be manufactured in this country to be payment in exports. [An HON. MEMBER: "What about raw material?"] I have yet to learn that the people who produce raw materials produce them for fun. They produce them to send them to this country, because there is being produced in this country some manufactures which can be sent out for payment of the incoming raw materials. If that is conceded, that raw material, of whatever character, comes in, not as indemnity but as international trade, then obviously somebody in this country is being employed to pay for that import. If this raw material comes in not as international trade but as indemnity, the essence of an indemnity is that there shall be no export to go out to pay for that import. Therefore people previously employed are thrown open the streets and stranded.
I hope that our Front Bench will take courage. [HON. MEMBERS: "Hear, hear!"] They will probably get it on this side; they will not get it on that. I hope our leaders will take advantages of the only loophole of escape I notice in this Dawes Report. I think there is a chance by which we can decide how and in what circumstances indemnities and reparations can be received. I hope this country will decide that they will not take them at all under any conditions whatever, because they will paralyse our own industry—I have a whole sheet of quotations which I need not read. I am referring to some people who live by working. That may not appeal to some other people. We defy hon. Gentlemen opposite to tell us in what particular commodity they are going to receive these indemnities and reparations without penalising to some extent the workmen of this country. I hope, our Front Bench will have the courage for the lack of
which the leaders of the opposite party have been distinguished since 1918 when colossally stupid figures were mentioned by the right hon. Gentleman the Member for Carnarvon Boroughs as being possible of receipt from Germany. Even the right hon. Member for Paisley (Mr. Asquith) did a double somersault on the same issue. We were all shouting the same about in 1918, because only very few had the courage to tell the people that this was a delusion. A few of us who were getting yelled at at street corners for telling people that this was industrial suicide have proved it to be so. I am glad the hon. Member for Penistone (Mr. Pringle) recognises me in his graceful way, and I hope he will raise his hat at this point. The right hon. Gentleman the Member for Paisley is now agreed that the receiving nation may be more badly hit in the receipt of indemnities than the nation Which produces them.
The right hon. Gentleman the Member for Paisley (Mr. Asquith) was asked by a heckler at Cupar, on 11th December, 1918—that is not so very long ago—when the right hon. Gentleman knew as well as he does to-day the economic effect of reparations, and when he knew as well as he does to-day the result of Franco-Prussian indemnity:
Are you prepared to support Mr. Lloyd George in the demand for indemnity and full reparation for all the damage done?
And he replied, not to be left out in the cold:
I made that demand years ago, and said we should enforce it.
There has not been up to now a statesman of front rank who has had the courage to come out and say, "You are deluding the people of this country, and we ask for a little common honesty."

Mr. PRINGLE: The right hon. Gentleman the Member for Paisley (Mr. Asquith) has done that.

Mr. DICKSON: I am quite glad to see anybody on the penitent stool before it is too late.

Mr. PRINGLE: He did it before any of the Members of your party.

Mr. DICKSON: Oh, no; he did not. Some of us were being yelled at at the street corners in Lanarkshire.

Mr. PRINGLE: The leaders of your party.

Mr. DICKSON: I am talking for myself. I hope this country is not going to be flooded by goods of this description to give some sort of fulfilment to the maddest promise ever made to the British people. I hope our Front Bench, who have gained, quite wrongly, a reputation for breaking promises, will take their courage in their hands and break this colossally stupid promise given to the country by the right hon. Gentleman the Member for Carnarvon Boroughs and those who believe with him.

Mr. A. M. SAMUEL: I agree with some things that the hon. Gentleman (Mr. Dickson), who has sat clown, has said. I do not agree with much of what my right hon. Friend the Member for West Birmingham (Mr. A. Chamberlain), in the earlier part of his speech, said. This is not a death-bed repentance. I expressed roughly what I express now in a signed letter to the "Times" on 20th September, 1923. I am not going to deal with that broad question of policy as far as Britain, France, Germany or the United States are concerned. I am going to deal with the financial problems.
The trouble will be for the hon. Member for Ilford (Sir F. Wise), the hon. Member for Stirling and Clackmannan (Mr. T. Johnston) and the last speaker to convince the French people of their views about the Dawes Report. I agree in the main with those three hon. Gentlemen. The Dawes Report seeks to put Germany on its legs for the purpose of her paying reparations to France and ourselves, and I believe it is being pushed along for the most part by the French nation. I have no tenderness towards. Germany, God knows! My family circle has lost more than any words can express, owing to the War. It is no good fooling yourselves or living in a Castle in Spain. This Dawes Report will not work for our benefit. If it be worked, the pivot on which it rests—and I will draw the attention of the hon. Member for Stirling and Clackmannan to this, for though we are opposed in politics we have many economic views in common—if you try to put this Dawes Report into operation, the first pivot on which it rests is a loan of £40,000,000 to put Germany on its legs. It is to be what is called a gold loan. That means setting up a gold mark, a dollar gold mark, and if you are going to have a dollar-gold-mark you may smash
the sterling Bill. You will smash the sterling Bill, unless you put sterling on a gold basis before the alliance between the gold mark and the gold dollar assails the supremacy of sterling. At the present moment we are second to the dollar, we are second to the Swedish kronen, and we shall be probably second to the gold dollar mark if Germany gets this loan of £40,000,000. If we smash the sterling Bill we shall throw thousands of men out of work. The sterling Bill gives us insurance work, it goes to provide shipping work and banking work, it touches the cottage of the weaver and engineer, and the cottage of the docker; the sterling Bill to us is of the greatest possible importance. If you put the Dawes Report into operation and give the Germans this £40,000,000 loan you put the mark on to a gold basis before we are on a gold basis, and Heaven knows what the result will be.
Let me examine further the effect of the Dawes Report. It cannot possibly function until the Germans have got the £40,000,000 loan, and then the German currency will be put on a gold basis. What is the next point. You have to get for the purposes of the Dawes Report a sum of annual Reparations which is still indefinite in capital terms in a limit of time which is not yet fixed—a sum of up to £125,000,000 a year. I wish my right hon. Friend the Member for West Birmingham bad examined that point rather than talk about the ceremonial at Chequers or the diplomatic blunders which the Prime Minister may have made, or the follies which may have been expressed. Let us get down to brass tacks and let us see what is meant by putting the Dawes Report into operation. You seek to get £125,000,000 annually in gold values from Germany, and that involves a foreign trade for Germany amounting to £3,000,000,000 a year. We have roughly a trade, in and out, imports and exports, of something like £2,000,000,000 a year and the total foreign credits that we were able to secure out of that as a result of our foreign trade last year, as stated in the Board of Trade Journal, was £97,000,000. To get a credit of £125,000,000 in the same way, Germany must have a similar foreign trade of something like £3,000,000,000 annually. Where is it coming from? You cannot pull it out of the air. And it must be an addi-
tional trade. The hon. Member for Lanark made use of the argument of having to resist the exports to us created by the Dawes Report. He was right, but he forgot the British exports to neutral markets that would be displaced by German exports.
How is Germany going to get a credit by her foreign trade of £125,000,000 a year? Is she going to send her goods here? Ask the Labour party if they would like that, and if they would like to see their friends and my friends smashed by it? Are the German goods going to America? Ask the Fordney tariff? It would soon be increased. Ask France if she is going to take the German goods. Why, she will not even allow Germany to renew her devastated areas! Italy will not take the goods. Belgium will not take them. Germany cannot pay £125,000,000 by the surplus of her visible and invisible exports until and unless she sells the goods. Where must they go? They must go to the neutral markets and those neutral markets must be in addition to the trade which at present exists. The additional demand does not exist. It is nonsense to talk about the German exports not displacing British exports. I came up on the railway this morning. I read an advertisement by the London and North Eastern Company asking people to go to Scotland by that route. I also read an advertisement by the London, Midland and Scottish Company asking people to travel by their route. No more passengers are created by going by one route rather than by the other. It is a case of trying to obtain existing trade from a competitor by means of advertisement. The hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) solves the difficulty by triangular exchange. The words are a lingual cosmetic. They don't create more trade. After all, this remains, that if you set Germany on her feet she will do business with our neutral customers and oust us, and pay us with the profits of trade captured from us. She will sell her goods and with the exchange will buy cotton, tea, wool and rubber from our people in the Colonies and in India, and some Members say the triangular exchange will pay us. On Friday I was in Westminster Hall and heard people murmuring Xenobium tessalatum. It sounded so attractive; like triangular exchange, or the Alake of Abeocuta, or
the winged victory of Samothrace. Lovely words. But murmuring "Triangular exchange" is not a substitute for the trade Germany will filch from us in neutral markets, although a current of triangular exchange will flow via Germany or Colonies and India and the neutral markets.
On the present basis of exchange we are doing business with the neutral markets and the Colonial benefit comes back through to London. The bases of your present triangle is, say, London-Manchester, but if Germany can only collar the neutral markets that base of the triangle will be transferred to Frankfurt and Dusseldorf and Chemnitz. The bon. Member for Central Hull seems to think we shall get more trade than before if the triangle's base is Frankfurt and Dusseldorf instead of Manchester and London. With an English triangle's base selling goods to, and doing business with, neutral markets we create the demands of Colonial and Indian markets, we enable our home market by means of the credit set up by one sales to neutral markets to buy tea and cotton and wool and other things. If the Germans get these credits by selling German goods to our neutral customers they will buy from our Colonies, but they will not create any more trade. They will simply take from our people the profits on German goods sold instead of English goods. The base will be transferred from our country to Germany. So much for the triangular exchange solution. Those who listen to fairy stories on reparations by this idealistic Prime Minister based on the Dawes Report must, I think, in order to save their own economic reputation, agree wit h what I said just now about triangular exchange not adding to the existing demand for goods. More demand is needed. It does not exist, and Dawes cannot create it.

Lieut.-Commander KENWORTHY: The hon. Gentleman has referred to me several times, but I suggest that mine is the sound proposition. Has it struck the hon. Gentleman that if Germany is prosperous she will be paying her debts?

Mr. SAMUEL: She can only become prosperous by taking existing trade out of the neutral markets, and, accordingly, as she becomes prosperous we become unprosperous. There is not in the world a fresh reservoir of £3,000,000,000 of
annual foreign trade for Germany to draw upon to create £125,000,000 of annual foreign credit for reparations.
The Dawes Report will enable Germany to filch our trade, and, moreover, crush our equipment for production, and is so indefinite that the French are saying to us that if we claim payment of what France owes us, and she awes us £650,000,000, she will have to ask for a larger amount of reparations from Germany. May I point out the terms on which we lent this money to France? I am willing to do all I can to help France over her difficulties. I would strain every nerve to help her, but we have borrowed for her use from America £650,000,000, and we are now repaying that loan with interest; every taxpayer in this country is paying Income Tax, which ought to be borne by France, which represents probably 1s. in the £. In this inter-Allied debts controversy it is not a right thing for France to take the stand she has done. She borrowed this money from us un conditionally on Treasury Bills. No condition was laid down about her repayment depending on reparations. Although this question is kept apart from the Dawes Report it cannot be kept out of our discussions with France, and it should be made clear that we are not going to allow France to import into this question any fresh conditions as to how or at what time she will pay what she owes us I make a strong protest against allowing France to shift her ground in regard to her debt to us. The Committee has been very kind to allow me to say at some length what. I feel so strongly about the probable effect on us of the Dawes scheme. No doubt hon. Members opposite will make some party capital out of what I have said.

Mr. JOHNSTON: No, no. We have said the same thing.

Mr. SAMUEL: I am not going to stand silent and acquiesce in a financial policy laid down by the Prime Minister which I know is all bunkum. If hon. Members opposite can only convince the Prime Minister and if we can only convince the French nation of that folly of the Dawes scheme we shall have made a good step in advance. We want peace, friendship with France and a European settlement. The Dawes scheme will not provide it and the sooner the French public has its
probable effect explained the sooner we can get a settlement in Europe.
There is one other point I would like to deal with because I see the Under-Secretary for Foreign Affairs is in his place. He was boasting the other evening that the Foreign Office was never supine. I put a question to him to-day as follows:
If he will request the Brazilian Government to give the reason for the default, since 1920, on its contractual obligations towards the Great Western Railway Company of Brazil, in which £4,500,000 of British capital is embarked; and will he ascertain from the Brazilian Government whether it is contemplating an application to British investors for a loan within the immediate future?
The Prime Minister gave me some sort of an answer, the best he could, but I gave him notice I should raise this matter at the earliest opportunity. I am going to ask the hon. Member for Stirling and Clackmannan to bear with me for a moment. The Arapuni Hydro Electric Undertaking of New Zealand has given a contract to Armstrongs and it is proposed that the money shall be raised here to pay for the machinery they will supply. We congratulate ourselves. New Zealand has always been, beyond all words, honourable and upright, and we wish every blessing to her. The lesson to learn is this. One set of English people put their savings into a loan called for by the need to pay Armstrongs, that is to say, a New Zealand loan. They find the money at 4 per cent. or 5 per cent., and Armstrongs find the wages and employ their men and export the hydroelectric machinery. It is the finest form of business we can do. But what about fair play for British investors who find money to pay for the goods? I have not a penny in this railway of Brazil, and I do not know that any of my friends have. We- built that railway, and one set of English people lent the money, and sent it out in the form of engines, trucks and rails. Now there comes along a set of circumstances, and the Brazilian Government is not able to keep its bargain with the lenders in England who built that railway. We have 4½ millions of capital lying dead and not a single sixpence of return for 10 years.
That sort of thing cannot go on. There are certain Members of this House who, with me, have made up their minds to
badger and worry the Foreign Office to make up its mind to see that British capital is not thus abused when lent abroad. The Foreign Office must not sit down and be supine. It had done nothing about the default of Brazil until I raised the question in the House. The Foreign Office has to go to the Brazilian Government and say, "If you are going to maltreat British capital sent to you, we are going to look after British investors "they are mostly small investors—" and we shall make it very difficult in future for you to raise money by loans in this country." Hon. Members opposite must not talk sneeringly about bondholders, as they did the other night about the Russian bondholders. Those bondholders are not bankers, but people who have saved a little money. The average British investor's holding is about £500. It is the small investor who has put his money into these loans at 4 per cent., 5 per cent. and 6 per cent.—not very much more than he can get in British Government stock at the present time. The Foreign Office has got to take care of them. It must not be supine any longer. It has an Overseas Trade Department which works alongside—a Department we set up four or five years ago. Here is another case: Money was raised in England to put down telephones in Constantinople. The tolls of the Galata Bridge between Stamboul and Constantinople were pledged. They have been confiscated by the Turkish Government in the last two or three weeks. What is the result? It makes it very difficult for export industry to get capital from the investor in this country for payment of the manufacture of goods: when the investor is invited to lend money he does so because he feels he is doing some good for the employment of his fellow countrymen while getting a return on his own savings. It will make it very difficult later on to raise further money for industry. Day after day we read of the Foreign Office folding its hands when investors' capital is endangered. Remember the Decree of Moharren and the Treaty of Lausanne. Many bondholders of small means in England have been injured owing to the rearrangement of the Turkish Debt. In the last three or four days there has been the case of the Egyptian tribute loan, which ought to have been looked after by the Foreign Office, and of which there are
large, numbers of holders in this country. Their security is in peril.
The Foreign Office has inherited a policy of despising trade. I have been in politics nearly 20 years, and in trade all my life, and I know how the Foreign Office looks at trade. I am one of those Chamber of Commerce men who have driven the Foreign Office to give us, practically, a small ministry of Commerce in the Overseas Trade Department. I do insist now on the Foreign Office looking after British investors abroad. I shall put down another question in a few days to ask what the Foreign Office has done with regard to the Western Railway of Brazil, and I would ask hon. Members, like the hon. Member for Merthyr Tydfil, to back me up to see that when money is asked for from the small investors of this country the Government shall take some steps to see that their rights and property are protected; that foreign Governments shall no longer be permitted to abuse British capital invested for the development of foreign countries, and usually at very low rates of interest.

Captain WEDGWOOD BENN: There are several preliminary observations which strike anyone who has sat, as I have sat, through every Debate on this subject since the Armistice was signed. The first is the spectacle of a Labour Government behind a Report—I am not condemning the Report—which enforces the denationalisation of the German railways, which lays upon the German nation a condition which means almost impossible railway travel, the abolition of rent control, and, according to the "Daily Herald," which has examined these proposals, the production of a surplus of 15,000,000 people in Germany who have either to starve, emigrate, or disperse themselves in some other way. The second preliminary observation is one of surprise that hon. Members opposite claim credit for this Dawes Report. The ex-Prime Minister spoke as if the Commission had been appointed by him. That is true, but when a Motion was brought forward last year by the right hon. Member for the English Universities (Mr. Fisher), and supported by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), asking that that famous speech of Mr. Hughes at New Haven should be taken notice of, I remember the late Prime
Minister, Mr. Bonar Law, treating very contemptuously our suggestion that, in the words of Mr. Hughes, "the avenues of American helpfulness cannot fail to open hopefully." He treated it very slightingly, and did not believe it offered a foundation of any good or useful work. But the proposal made at that time was the basis on which this Report was founded, and on which the success, so far as it has been a success to this point, has been achieved. I would like to make one or two observations on the Report itself, before I come to the question of its application to the Prime Minister's proposal.

Whereupon the Gentleman Usher of the Block Rod being come with a Message, the Chairman left the Chair.

Mr. SPEAKER: resumed the Chair.

Orders of the Day — ROYAL ASSENT.

Message to attend the Lords Commissioners.

The House went; and, having returned,

Mr. SPEAKER: reported the Royal Assent to—

1. West Indian Islands (Telegraph) Act, 1924.
2. Auxiliary Air Force and Air Force Reserve Act, 1924.
3. Small Debt (Scotland) Act, 1924.
4. County Courts Act, 1924.
5. Prevention of Eviction Act, 1924.
6. Pacific Cable Board Act, 1924.
7. Marriages Validity (Provisional Orders) Act, 1924.
8. Ministry of Health Provisional Orders Confirmation (No. 1) Act, 1924.
9. Ministry of Health Provisional Orders Confirmation (No. 2) Act, 1924.
10. Ministry of Health Provisional Orders Confirmation (No. 3) Act, 1924.
11. Ministry of Health Provisional Orders Confirmation (No. 4) Act, 1924.
12. Ministry of Health Provisional Orders Confirmation (No. 5) Act, 1924.
13. Ministry of Health Provisional Orders Confirmation (Water) Act, 1924.
14. Ministry of Health Provisional Order Confirmation (Watford Extension) Act, 1924.
15. Ministry of Health Provisional Order Confirmation (Stratford-upon-Avon Extension) Act, 1924.
127
16. Board of Education Scheme (Female Orphan Asylum, etc.) Confirmation Act, 1924.
17. Greenock Improvement (Extension of Time) Order Confirmation Act, 1924.
18. Coatbridge Burgh Extension 'Order Confirmation Act, 1924.
19. Kilmarnock Corporation Order Confirmation Act, 1924.
20. London and North Eastern Railway (Dock Charges, Scotland) Order Confirmation Act, 1924.
21. Glasgow University (Barbour Scholarship) Order Confirmation Act, 1924.
22. Burntisland Water 'Order Confirmation Act, 1924.
23. St. Enoch's Church and Parish Quoad Sacra Order Confirmation Act, 1924.
24. Clydebank and District Water Order Confirmation Act, 1924.
25. Stroud Water Act, 1924.
26. Southampton Harbour Act, 1924.
27. King's Lynn Docks and Railway Act, 1924.
28. Harrogate Corporation Act, 1924.
29. Sunderland Corporation Act, 1924.
30. Aberdare Canal Act, 1924.
31. Malvern Hills Act, 1924.
32. City of London (Various Powers) Act, 1924.
33. Staffordshire and Worcestershire Canal Act, 1924.
34. Great Western Railway (Dock Charges) Act, 1924.
35. London County Council (Tramways and Improvements) Act, 1924.
36. London Midland and Scottish Railway (Dock Charges) Act, 1924.
37. London and North Eastern Railway (Dock Charges) Act, 1924.
38. Hackney and New College Act, 1924.
39. Wandsworth Borough Council (Superannuation) Act, 1924.
40. Aire and Calder Navigation Act, 1924.
41. Lancashire Asylums Board Act, 1924.
42. Haslingden Corporation Act, 1924.
43. Central London and Metropolitan District Railway Companies Act, 1924.
44. Southern Railway (Dock Charges) Act, 1924.
45. Spencer Settled Chattels Act, 1924.

And to the following Measures passed under the provisions of The Church of England Assembly (Powers) Act, 1919:—

1. Benefices Act, 1898 (Amendment) Measure, 1923.
2. Union of Benefices Measure, 1923.
128
3. Ecclesiastical Dilapidations Measure, 1923.
4. Bishopric of Blackburn Measure, 1923.
5. Diocese of Southwell (Division) Measure, 1923.

Orders of the Day — SUPPLY.

Again considered in Committee.

[Mr. ENTWISTLE in the Chair.]

FOREIGN OFFICE.

Question again proposed,
That a sum, not exceeding £92,594, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1925, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs, including the News Department.

Captain BENN: When we were interrupted I was proceeding to make one or two observations in connection with the Dawes Report itself. I need not say that it is not my desire—and I am sure it is not the desire of any Member of this House—to hamper the Prime Minister, and while, rightly, expressing our views on the matter—for it would be a dereliction of duty if we did not do so—to wish him Godspeed in his task. I think we are all at one in that. Still, I think we should not be doing our duty if we did not lay before him the view that we hold, and a view for which we have fought for years, ever since peace was declared. In one of the paragraphs of the Report it speaks of a figure of £125,000,000 annually or it may be more. Be it observed that the Report says this is merely a Budget surplus. It does not speak of an exportable surplus at all. It says that this £125,000,000 is the Budget surplus. Then it proceeds to say, what is often said by well-informed men, that in some way Germany has profited enormously by the collapse of her currency, and that if she is in great need, as soon as this Report is in operation she will be in a position of greater industrial strength. I confess I have never been table to understand how bankruptcy can put people in that position. What has happened to people who held Government script? People who held mortgages and debentures? They are all valueless. If, on the one hand, somebody has gained by the wiping out of the National Debt, on the other hand someone has lost by losing
security in the matter of capital, or whatever it may be, in the carrying on of business; and if true, assuming, as do some hon. Members that the total depreciation means nothing but Government debt, and that wiping out or repudiation of Government debt is a good thing, then, surely, it is time we tried the result of a 100 per cent. capital levy? [An Hon. Member: "Hear, hear !"] The hon. Member on the Labour Benches agrees so far, but he will not go with me the whole way. He thinks it is bad in Germany, but good in England.
I observe that the Dawes Report does not speak of an exportable surplus. It speaks of a budget surplus. We must form our own judgment as to what exportable surplus is to be expected or got from Germany. The hon. Member for Farnham (Mr. Samuel) who has just spoken dealt with this matter, and Mr. McKenna's own report—a twin report to the Dawes Report—explains that since the Armistice there has actually been a deficit of exports, taking into account also the Treaty payments which were considerable—nine or ten milliards gold marks. That does not very much look as if Germany was in a position to produce this large exportable surplus. We have got also to answer this question. Will the surplus we hope to get take the form of goods? If so who is going to take them? It means £125,000,000 worth of goods. I remember quite well that in 1921 the first sign of revival in Germany's export trade was disturbing and we found good free traders—at least they considered themselves so—several of them who proceeded to bring in a Bill for making it impossible, or almost impossible, or difficult, for these German goods to be admitted into this country. There is no reason to suppose that people will be prepared to welcome such a surplus of German goods if it is forthcoming.
Further than that, we must envisage the situation I think—always assuming the Dawes Report will work—when, under pressure, we have reduced the industrial area in Germany capable of producing the surplus of £125,000,000. Will it also go for nothing that these goods, which are to be sold in the markets, are in competition with our goods? If it is a natural growth which increases the German exports and our own exports in a reciprocal way, then it is a wholesome
thing. But these violent fluctuations by artificial means will not be welcomed by the manufacturers or the workers of this country. That is merely a general observation, but all the nations which are parties to the reparation arrangement have intimated that they are willing to enforce the Dawes Report and desire to see it accepted, and I shall confine myself to that problem.
8.0 P.M.
The first question I wish to ask is, does the Prime Minister really contend, or does the Under-Secretary for Foreign Affairs contend, that the obligations which are laid upon Germany by the resolutions of this Commission are within the Treaty? There is in Annexe II a very general Clause which says that Germany shall undertake to pass what legislation is necessary for this purpose, but there is no mention of such a thing as denationalisation of the railways, which is a constitutional change in Germany, and not an industrial change, and there is no mention of debentures on industry or any such device. The welcome expression of opinion in the first Note I thought set forth ideals with which I found myself very much in sympathy and they were quite clear. They used the phrase, "These demands went far beyond." Anyone who has studied them must come to the conclusion that they do. Incidentally it is true that these are merely demands made under Annexe II. The bondholder has to realise that he is handing over to the Reparation Commission control of all the money he lends to Germany because it is held that, with such exceptions as they make, the Reparation Commission has a complete hold upon German assets, and, in America, they were informed by the Reparation Commission that that Commission had the first lien.
The Prime Minister under stress of the desire to make an agreement—I can well understand his difficulties and the importance of making the agreement—said that while holding his own view on the subject he is going to refer this question to experts as to whether the demands of the Dawes Report are inside the Versailles Treaty. Supposing they decide that they are not, are we to understand that these other proposals are going to go forth, although the body charged with the execution of the plan will be dealing with something which is not within its
function, or the terms of the Treaty, at all? I must say that while I have no desire to say anything to cause any difficulty, I look with some apprehension as to what will be done in this respect. We have heard some talk about revising the Versailles Treaty, but I will put the question which the present Prime Minister put to the Prime Minister of that day, and I will ask him, "What is your opinion about the Ruhr occupation?" Is that within the terms of the Treaty? It is all very well to talk about a treaty being sacrosanct, but it is no good having a treaty which is to be observed to the letter when it is in our own interests, and which can be flouted when it is against the interest of our defeated enemy. These are points which certainly demand attention.
The essential hope of the Dawes Report was that it was intended to be a voluntary engagement by Germany. The time for dictated decisions has really ceased, for it has been tried ever since the end of the War. Terms have been thrust upon Germany, and it has never been a voluntary act. I agree that they deserve to have hard terms for their guilt in bringing on the War, but at the same time if you want money you must have a voluntary engagement by Germany, and there is no question in the Treaty of a voluntary engagement, because Treaty terms are dictated terms, and we hope the terms of the Dawes Report will be negotiated and agreed terms. With regard to the Reparation Commission it has not a very successful record. Ever since the terms it concocted in 1926 fixing £6,600,000,000 as the German debt, all through the times of the moratoriums and the new demands, and the whole story down to January, 1923, when the Ruhr was occupied is not one of success, and it has not produced very much cash as far as the Allies are concerned. Right down to December, 1922, they declared that the 2 per cent. of wood delivered for telegraph poles was a default, and that opened the doors of all the horrors of the occupation of the Ruhr. I would like to know how such a body is to be strengthened
I understood for this purpose Great Britain, Italy and Belgium are to be members of the Commission and an American representative is to be added. We learn that an American has been
appointed by the American Government and he is to have a vote, but he is only to have a vote when default is in question. Those who read the Dawes Report will see that there is no hope of payment by these proposals unless certain things are clone in the interest of Germany, namely, the restoration of the complete sovereignty of Germany over her own territory as laid down in the Treaty of Versailles. A great many other things have to be done, and all the filibustering in the Ruhr must cease. These people must be withdrawn and the sovereignty of Germany must be restored. That is the proposal of the Dawes Report.
What is the good of putting on this Commission an American representative merely to judge what is called a default unless he is there to judge whether the terms of the Dawes Report have been properly executed or not. We want to know whether that sovereignty has been restored or not. The American representatives will be interested in the £40,000,000, but he is also interested in seeing that the French clear out of the Ruhr, that the Germane have control of the traffic, and that the Regie gives up control of the railways. To say to the American representative. "We will call you in because we thought we would get so many hundred millions and we have not succeeded," is ridiculous. This Commission was supposed to be a fair and equitable Tribunal for deciding these matters.
There is just one final point and it is this. What about default when it occurs in the guarantees? Paragraph 18 of Annexe II says it may include:
Economic and financial prohibitions and reprisals, and, in general, such other measures as the respective Governments may determine.
It is laid down that the interpretation of that paragraph must be unanimously made by the Reparation Commission, and despite that provision there was independent action taken by the French in the Ruhr when Great Britain was unanimously opposed to it. Is there to be no safeguard against such action in the future? The Prime Minister says the default would be judged by the Reparation Commission and this is to be done in a left-handed way by making some American a member of that Commission. M. Poincaré and M. Herriot said the other
day that France reserved the absolute right to independent action. In conclusion, I sincerely wish that the Prime Minister will be successful in arriving at the settlement of this question, and it is no good pretending. Debate after debate has taken place in an atmosphere of pretence, and we are told if everybody will be quiet and agree everything will be all right. In my view silence is useless if dangers are being incurred. I contend that it is oar duty to point out to the Prime Minister that unless it is very much strengthened, the plan he has agreed upon for the working out of this Report with the French will not work at all, and it may drag us at the tail of a policy of which we disapprove.

Mr. MOREL: Until the hon. and gallant Gentleman who has just sat down made his very interesting speech this Debate might have been divided into two sections, realities and unrealities. The realities came from the back benches and the unrealities came from the front benches. It has been a most amazing thing to some of us who have been very violently attacked for years for condemning the whole reparation policy to find hon. Members opposite and below the Gangway endorsing statements which we have been making for a very long time. I think many of us here can claim having denounced the whole of this system at a time when nobody else ventured to do so. There is just one point that I should like to touch upon before coming to the Dawes Report. We have heard a good deal about secret diplomacy. If there is one thing upon which Members who sit on the back benches in this part of the House are agreed, without any difference of opinion at all, it is that never again, if and so far as we can prevent it, will a Government of this country, whatever its complexion, be in a position to commit us without our knowledge and behind our backs in secret treaties, or, what is more dangerous, diplomatic and military agreements which happen before the treaties. That is what we mean, and that is what we have always meant, by secret diplomacy, and if it were conceivable—which I do not think for a moment it is—that a Labour Government would act against that conviction of the Labour party, I have not the least doubt that it would be broken by its own followers within 24 hours. But
we have never described as secret, diplomacy conversations between statesmen, and if, as is very regrettable in this case, there have been misunderstandings as to what took place during the conversations at Chequers, you may describe that as you like, but you cannot describe it as secret diplomacy. It, does not lie in the mouths of some hon. Members of the House to do so, and certainly it does not lie in the mouth of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), an article and a speech by whom read the other day in the papers, and who was one of the principal authors of the Versailles Treaty, in which secret diplomacy received its apotheosis, to gibe at my right hon. Friend for what appears to have been a regrettable lack of proportion, but certainly not more than that, in issuing a report of the conversations.
With regard to the Dawes Report, it would be dishonest and it would be quite idle to pretend that the Dawes Report is not regarded by many of us on these benches with a most profound apprehension, and that apprehension has not been lessened by what we have heard from the Prime Minister to-day. 'We, have seen, within the past few days, renewed evidence of the power of M. Paincaré over French politics. We have seen French politicians coming to heel at the crack of his whip, the sound of which we on these benches are thoroughly tired of hearing. We have also seen the proposal put forward by the Government that these new claims upon Germany went so much beyond the Versailles Treaty that they needed an impartial authority to determine whether there was a default, and we have seen that very wise stipulation whittled down until it has in fact practically disappeared, because we have been given to understand to-day that, as a matter of fact, the counter-proposal that there should be an American representative will not take effect. Finally, we have also observed within the last few clays an absence—to put it no stronger—of any indication of an intention on the part of the French to evacuate militarily the Ruhr, and that is the most alarming symptom of all, because I think the only serious justification for accepting the Dawes Report would be if that Report puts an end to the latent state of war which has existed in Europe ever since Allied statesmanship admitted the prin-
ciple, and ever since the French and Belgians put that principle into practice, that it was tolerable that there should be an invasion of German soil, an abrogation of German civic law, and an elimination of German sovereignty, in order to force payment of reparations. If the Dawes Report does not bring that principle to an end, there is no justification whatever for this country, at any rate, accepting it.
One thing is certain—I think it has been stated in this House, and I think it ought to be stated again—and that is that the Dawes Report is not going to solve the problem of reparations. How many times has the statement been made in the last few years that the salvation of Europe depends upon a settlement of the reparation question? But the salvation of Europe has been prevented, is being prevented, and will be prevented, by the reparation policy, and for my part if we were called upon to vote in this House on the Dawes Report, I should vote against it unless I had an absolute guarantee from the Government that our acceptance of the Dawes Report did not in any way tie its hands from adopting, at any moment it chose, a decisive and distinct national policy with regard to the whole question of reparations so far as our share was concerned. I do not say that that national decision ought to be expressed at this precise moment, but what that policy ought to be I have not the least doubt. We should abandon, for our part, our share of reparations. Some hon. Members opposite, though not, perhaps, as much as they used to do, are inclined to suggest that any talk on reparations policy from this side of the House has been dictated purely and solely from the desire to be fair to the German people, but I say, and always have said, that we ought to abandon reparations—I do not exclude the other point, to which I will come in a moment—from the point of view of our own economic interests primarily, and from the point of view of, perhaps, the greatest of all our interests in the ultimate resort, the preservation of peace in Europe.
This reparation policy does not make, for a peaceful settlement; it makes for dislocation and war. Indeed, my own feeling in this matter is that, if the Dawes Report receives the support, as it
does, of a certain number—shall I say a large number?—of financiers, business men and economists, it is because they entertain the, view, although, perhaps, it is discreetly hidden, that it will show, after a year or two, that the whole idea of obtaining these vast sums of money from Germany is impracticable in practice, because the Transfer Committee will not be able to transfer to Germany's creditors, either in Gorman currency or in deliveries in kind, the vast sums which are laid down. That hope may mature, but on^ thing is perfectly clear, and it is the most dangerous aspect of the whole Report, namely, that he whole of this stage-managed Conference, base upon the still continued partial ignorance of the. British people of the essence of the reparation policy, and the complete ignorance of the French people of the essence of the reparation policy, is based upon the expectation held out to the British and French peoples that these huge sums of money will, in fact, be obtained. That is the, most dangerous thing, because, after those expectations, the reaction of disappointment will come about when it is found that they cannot be realised. That will lead once more to a revival of feeling, and the whole thing will again be thrown into the melting pot. One of the most remarkable statements in M. Harriot's recent speech is that he is holding out—and he may be sincere; I do not question his sincerity—to the French people the hope that for 40 years these sums will continue to be paid, that, a from the fourth year £125,000,000 a year will be obtained from Germany. That is midsummer madness, and it is midsummer madness of the most dangerous kind. So far as the effect upon reparations and upon ourselves is concerned, let us look at the past and endeavour to estimate the future.
This dislocation in Europe, which has brought such enormous national losses in providing for our unemployed and such enormous expenditure on armaments, has been due to the chaos and confusion aroused by this policy of punishment embodied in the Treaty of Versailles, which apparently is now sacrosanct, but which all of us on those benches have been denouncing for four years, and I hope the back benches will continue to denounce it. The economic result upon this country of this policy of punishment,
the corner stone of which is reparations, I reckon we can all rightly and without exaggeration put down at £500,000,000. The national loss that we have incurred in the last five years has been brought about by the confusion and chaos introduced in Europe by this policy, and I am sure those figures are very much below the mark, and against that., according to a reply which was given me by the Secretary to the Treasury on 29th May last, we have had a receipt of £15,000,000. £500,000,000 on the wrong side, and £15,000,000 on the right side. That is a kind of bookkeeping which does not appeal to me. One might say the Germans have paid for the upkeep of the small British Army on the Rhine for the last five years. That is true, and those who like to put that in the balance sheet can do so. But the British Army on the Rhine represents to my mind a credit of a totally different character, the credit which attaches to the conduct of our troops there—the only decent page in the whole history of the foreign occupation of the Rhineland. So much for the past. We know that after these five years of confusion we have got £15,000,000 out of reparations and we know that the policy of which reparations is the cornerstone has cost us hundreds of millions.

Mr. HANNON: Will the hon. Member indicate how he arrived at this £500,000,000 of economic loss to this country?

Mr. MOREL: That would take much longer than the Committee would care to hear, but if the hon. Member attributes, as I attribute, a very large portion of our unemployment to the confusion and chaos produced in Europe by this policy, and the incidental expenses connected with that, and the loss of trade and so on, he will find that the figure of £500,000,000 is not excessive. We have pursued this Will o' the wisp of reparations—I am dealing now purely with the economic point of view—for five years, and it has produced £15,000,000. Now there appears to be in the mind of someone, according to the Dawes Report, a chance of getting large annuities out of Germany. My contention is that if we succeed in getting those large annuities, the last state of this country will be worse than the first, and this for perfectly simple reasons. Surely every economist will admit that
it is axiomatic that those reparations can only be paid by a surplus of exports over imports. That means that the whole enormous machinery of German production is going to be driven in the direction of enormous expansion in her export trade. Experts estimate that even under ordinary circumstances, in view of her loss of territory and in view also of the partial loss of her foreign investments, Germany must export in order to provide for her essential needs at least £140,000,000 more in terms of current values than she did before the War—that is before you come to reparations—and on the top of that essential increase of exports we are going to put a further demand upon her which will compel her to produce £125,000,000 more. How is she going to do it, and what will be the effect upon the world and upon us if she can do it? She can only do it, of course, by producing goods cheaply by very high organisation, by mass production, and by driving down the condition of her working classes, decreasing their wages; in other words, realising a large scale production at the cheapest possible cost.
May I pause here to ask the right hon. Gentlemen on the Front Bench what kind of posture is a Labour Government going to be in which is demanding tribute from Germany at the expense of driving the German working man down the scale, which inevitably means a reaction upon our working men. That is a loyal Member of his party who has the right, in present circumstances, to ask that of the Government. Everyone knows what will happen. There will be a series of strikes in Germany against starvation wages and abominable conditions forced upon the German working classes by this Dawes Report. What is going to be the posture of a Labour Government in the face of strikes of German working men in order to pay tribute to us and to other nations? The general effect of Germany being forced to this enormous expansion of her export trade is going to make Germany the workshop of the world, driving out her competitors in the neutral markets everywhere. The effects are going to be particularly disastrous because the materials which Germany can more easily export to meet this demand upon her are just in those very trades, the metal trade and the steel trade, in which she is already a direct competitor with our-
selves, and as the tendency progresses there is every fear that those long-established and, under ordinary circumstances, permanent trades in this country will be crippled, if not ruined, and may be replaced or may not by other trades, more or less parasitic trades, dependent for their continuance upon the continuance of this cheap material from Germany, which may stop at any moment—a most precarious condition for our industry to be placed in. In fact if this insane policy is persisted in there is not the least doubt that Germany will virtually get hold of all the great metal, electrical, chemical and other so-called scientific industries in which she has already a relative superiority to us in expert knowledge, trained labour, and equipment.
I was amazed when I heard the speech of the Leader of the Opposition, because he has in my opinion gone nearer to telling the real truth about reparations to the British public than any British statesman has done. He made a very remarkable speech in this House in November, 1923, just before he opened his Protectionist campaign, and I have always believed that at the back of his mind in starting that Protectionist campaign was this very fear. Speaking of Germany and German reparations he said:
What I want to know is, where are those exports going? The most obvious place for them to go first is into the openest and freest market they can get, that is to say, ours. Unless there happened to follow a period of world expansion such as followed the introduction of Free Trade into this country—an expansion partly due to discovery in industry, and partly due to discoveries of gold—unless you could have some world expansion of that kind, you will have an immense amount of suffering in every industrial country in the world that receives those exports, but principally in our country. Theoretically, it is perfectly true that over a period of years the position may right itself, but the process of absorption may take many years, and the dislocation that will be caused in the highly-developed industrial communities is a dislocation that will ruin them before the absorption takes place."—[OFFICIAL REPORT, 15th November, 1923; cols. 484–5, Vol. 168.]
In order to show the absurdity to which this statesmanship of economy or this economy of statesmanship has reduced us, the right hon. Gentleman produced his tariff. What for? To keep out the very reparations from Germany which he is demanding. He wanted his tariff to protect the home market. Even assuming
that a tariff would protect the home market, no tariff is going to prevent the German reparation goods from swamping the neutral markets and from swamping China, South America and Russia. May I venture to suggest to my hon. Friends below the Gangway, who are Free Traders, that if this policy of reparations is continued their demand for the continuation of unrestricted imports into this country goes to pieces. They will never be able to sustain it. A reparations policy means no Free Trade.
The whole of this scheme from the economic point of view is an attempt to rebuild the economy of Europe upon absolutely unsound lines using this enormous human machine production in Germany in an abnormal way; abnormally forcing its output and abnormally restricting its imports. We are going to be the chief sufferers. In fact, the more we screw reparations out of Germany the harder we are going to be hit. It really is time that an appeal was made, not only to my right hon. Friend the Prime Minister, but to the leading statesmen of all parties, to tell the country the truth about reparations, to tell the country the truth of the tremendous danger from the economic point of view—heaven knows, there are other tremendous dangers—of maintaining a policy which, if it be successful, will ruin us.
May I say a word about the arguments which are put forward in favour of maintaining this reparations policy? The arguments against are so tremendous that the whole House, in spite of our differences of views, both on domestic and foreign policy, appreciate them, that one would think the arguments in favour would be correspondingly strong; but when you come to examine them they are deplorably weak. They are practically all based—the point was urged by the hon. Member for West Birmingham (Mr. A. Chamberlain)—upon the view that owing to the fact that Germany's internal debt has disappeared we have to set against that a great external burden or she will compete with us disastrously in the markets of the world. There is a double fallacy there. If the disappearance of Germany's internal debt makes her a more powerful competitor against us, it is even more true that if you put a great external burden upon her, which means an artificial increase in her exports, you will be adding an additional power to the power
which she already possesses as a competitor by having got rid of her internal debt. You are doubling your danger instead of removing it. That seems a queer way of dealing with an economic problem.
There appears to be a continual confusion as to the effect upon national resources of internal and external debt. I speak with deference in the presence of the hon. Member for Ilford (Sir F. Wise), who is a much greater authority than I am on this financial question, but, surely, an internal debt does not involve a reduction of the national income. In other words, it makes the rich richer and the poor poorer. The interest and sinking fund raised in the country are spent in the country; the money remains in the country in the case of an internal debt. In the case of an external debt the money goes out of the country.

Sir F. WISE: My point was that Germany should have an internal debt equal to our debt on the industry and commerce of the country, and that the coupon should be paid to the gold banks and not cashed.

Mr. MOREL: My hon. Friend is an expert on this matter and knows a great deal more about it than I do, but it seems to me that there is general confusion as to the effect of an internal debt and the effect of an external debt. An internal debt does not make poorer the country that pays it. An external debt does make poorer the country that pays it. Nearly nine-tenths of our national debt is a domestic debt. That is a fact which seems to be very often overlooked in these comparisons between Germany's external debt under the Treaty and our internal debt. Nine-tenths of our debt is an internal debt and only a little over one-tenth of our debt is for services abroad, especially for the United States. What we are asking Germany to do is to pay more than three and a half times the amount of our annual tribute to America. Therefore, the comparison between our internal debt and the external debt which is sought to be forced upon Germany under the Dawes Report is not analogous.
For the rest, is it to be seriously argued that the condition of Germany to-day is better owing to her having got rid of her internal debt and having suffered from the effects of inflation, which have ruined
a large section of her middle classes, and caused terrible poverty and distress? Is it seriously argued that her condition, having got rid of her internal debt, but having suffered from the results of inflation, is better to-day than it would have been if she had not got rid of her internal debt and had not gone through the process of inflation, then, surely, the right policy should be not to place this burden upon her, but to get rid of our own debt, which we could do by much less harsh measures than inflation. The fact is that this terrible burden of our internal debt is not a problem of foreign policy at all, but a problem of domestic policy, and we are not going to solve it by trying to cripple one of our numerous competitors abroad. Our true economic policy is to give up our claim for reparations provided, of course, that the total demanded of Germany—whatever that may be, for nobody seems to say definitely what Germany is expected to pay—is decreased by an equivalent amount, and a bargain is made with our Allies to decrease their demands on Germany in proportion to the decrease in our debt demands. If that be our policy economically, it is also our policy, strategically and politically, not to allow Germany to go on being treated as the outcast of Europe. I am very much afraid from that point of view—I do not propose to go into it to-night—that Englishmen and Scotsmen will live to anathematise the statesmanship which allowed Germany to become absolutely impotent in Europe.
In conclusion, I have said, and I repeat, that the acceptance of the Dawes Report by our Government is justifiable only if it puts an end to the state of latent war which has existed in Europe for five years and if we preserve, despite our acceptance an absolutely free hand to adopt a decisive distinctive, national policy with regard to reparation. I will be no party to inducing, by my silence on these Benches, the British public to believe that this last attempt to square the circle, and to make economic truths compatible with the violation of economic truths, is going to settle this tangle in the days to come. Even if the Dawes scheme were economically unassailable that would be only half the problem. I am about to make remarks which, I dare say, will jar on many hon. Members. That cannot be helped. I maintain that
no economic problem that ever was, or ever will be, can be decided without considering the psychological factor.
In all these debates and calculations about what Germany is going to pay the psychological factor is left out. Consider what kind of psychology you are going to create in that great country by this vista of enmities to which apparently there is no end. For 40 or 50 years Germany is to go on paying £155,000,000. Think of the psychology that that is going to produce. Think of the basis on which that demand is made, that Germany was solely responsible, that she plotted the War, and that all the other belligerents were as innocent as lambs. Does any sensible intelligent man outside Germany, let alone inside Germany, believe that to-day? It has been rejected by every historian both in this country, and in every country, I think, except France. If in that connection Germany is invited to join the League of Nations as an equal, then we certainly ought to give her the right, if she asks it, the right which our civic jurisprudence refuses not to the lowest criminal, to state her case in reply to this charge which is made against her.
But, putting that aside, who is going to pay the reparation? It is not the ex-rulers of Germany, who are living in comfort in Holland and other places. It is not the industrialists of Germany. It is the common men and women and children of Germany, the working classes of Germany. What offence have they committed that this burden should be laid on them from year to year and from generation to generation? We had a remarkable speech made the other day by Senator Owen in which it was pointed out that 20 per cent. of those people in Germany on whom reparations fall were born since the War broke out, and that 80 per cent. were women or children when the War broke out. How can you build a temple of peace upon such a rotten moral foundation as that? I suppose that I am a very stupid person, in fact I have come to the conclusion that I must be, because it is incomprehensible to me how any statesmanship worthy of the name can imagine that this policy of punishment, going on again, now restarted under the Dawes Report, can have any end but that of another European war, and yet we had
the speech of Lord Ypres to the school children at Deal the other day.
Every nation is preparing for war because the political law of Europe which prevails to-day is an unjust law a law which inevitably makes for a revolt of the people who suffer against the conditions imposed upon them, and that end will come unless some man big enough to rouse the conscience of Europe, and unless some man with executive power, can rise sufficiently to stake all on facing the acceptance of the truth on the people of the world. Short of that, then the peoples will say to their Governments, "Go on with your play acting. Go on with your make-believe. Go on with your dishonesty. Go on with your absurd conduct. Lead us to massacre one another. Put into our hands again your murderous weapons for that purpose, and the hour that you do that will mark your doom and the doom of your senseless, your criminal and your inhuman institutions."

Sir A. SHIRLEY BENN: I have listened with great interest to the speech of the hon. Member for Loughborough (Brigadier-General Spears), as a Liberal Free Trader, and to the speech of the hon. Member for Dundee (Mr. Morel). Both of them referred to the danger that would accrue to England if German exports for reparation came into Great Britain. The object of the Dawes Report is to bring about the pacification of Europe, and in order to produce this result it devises methods by which Germany may he made to pay some of the reparations for her misdeed during the War. I do not believe that it is going to produce pacification. The Dawes Report puts German taxation into the zone of Allied taxation. Those of us who know the difficulty that is felt by those in the Allied countries, who have to pay the present taxation, realise fully that Germany, if there is to be that taxation, must go in for greater manufacturing. No country can be prosperous unless it has unlimited mineral resources or very fertile soil, unless it has successful commerce. It ought to be able to produce sufficient manufactured goods for its own requirements or sufficient to send abroad to get the money with which to buy her imports.
Germany was our great competitor before the War, but, during the War,
other countries sprang up. America doubled her manufacturing plants, and to-day we have not got sufficient markets in the world for the manufactured goods that are offered. That is not recognised by all. If Germany should, as the last speaker has stated, push forward her manufacturing, there will be more goods for sale in the world than the world can absorb. What will be the result? We shall have our working men standing idle, because we are buying goods at a price lower than that at which they can make them, while we are giving the gold with which to pay reparations to other countries. I feel very strongly that this is a time when every effort should be made for the pacification of Europe, but I do not believe that that will ever be accomplished until some great man comes to the front and says, "There must be a neutral line drawn between France and Germany under the League of Nations, and that line must be held sacred." Hon. Members may recollect that it was suggested to Germany after the Franco-Prussian War that Alsace-Lorraine should be neutralised. Bismarck would not agree to that, because it meant that he would find a line of neutral States running direct from the North Sea to the Swiss Alps, and in the case of trouble between France and Germany it would be impossible for Germany to bring her troops into France. That is why it was not done then.
All that France needs to-day in protection of her frontier, and if someone could devise a means by which she could have that protection I believe there would be the pacification of Europe that we all want. We do not want to go back on the past. I do not agree with the last speaker in wishing to see the question of the War revived. The thing is done; it is ended; and the sooner people of the coming generation forget about it and go on and work, the better it will be. As far as reparation is concerned I think it is a very dangerous thing for the country which advocates it. Let us recollect what happened to Rome. After her victories Rome brought back her captives as hewers of wood and drawers of water. And what became of her power? I hope that this Pact may bring the leaders of the different countries together, and that they may not be bound
altogther by the Dawes Report, but may suggest some scheme by which the pacification of Europe can be accomplished.

Lieut.-Commander KENWORTHY: I congratulate my hon. Friend who has just spoken not only on the admirable substance of his speech but on his admirable brevity. I cannot equal him in the first, but I shall try to equal him in the second, or very nearly. My right hon. Friend and Leader the Member for Paisley (Mr. Asquith) has declared himself in favour of the treaty of mutual guarantee, and I am sorry that we have had no encouragement on the question from the present Government. It may not be a perfect treaty, but there have been two years in which to put it right, and I see no signs of a constructive policy with regard to this or any other scheme for bringing about that security which has been referred to, and its collateral result, a general reduction in the armaments of Europe. There have been two years and the present Government have not done very much and have not declared themselves. They have had time to do wonders. At least we could have had some clear lead. I am sorry to say that I heard only the concluding sentences of the very eloquent speech of the hon. Member for Dundee (Mr. Morel), but what I heard him saying was not very complimentary to his Leader, the Prime Minister. He said "Go on with your absurd conferences. Oh! for a man big enough to give a lead to the suffering peoples of Europe." I agree with him. Would he have said that last year? He would have said "No, we have the man, the future Prime Minister, the first Prime Minister of a Labour Government." I do not despair of the Prime Minister, however, and if he gives a lead—

Sir KINGSLEY WOOD: Hear, hear!

9.0 P.M.

Lieut.-Commander KENWORTHY: I never despair of a man till he is dead. If the hon. Member for West Woolwich (Sir K. Wood) will give a lead in this question, I will follow him gladly, and so will the peoples of Europe. What sort of lead do we want? It is no use insisting on the disarmament of Germany while all other nations remain armed. With the advance of science, of chemical discovery, with the greater use of aircraft and of mechanical means of warfare, it is becoming easier
and easier for great industrial nations to arm themselves quickly and in a very deadly way. We cannot expect the other nations to follow the German and Austrian example of disarming unless we have some system of mutual guarantees. I do not agree with certain Members of the Liberal party who attacked the Treaty of Lausanne because we were committed by that Treaty to defend the demilitarised zone in Turkey in case of unprovoked aggression. If you ask people to reduce armaments you must guarantee them assistance in case of unprovoked assault. That fact will have to be accepted if we are to make any progress at all. In the finally agreed version of the letter of 9th July, the questions of security and inter-Allied debts are apparently to be raised concurrently with the present Conference or perhaps by some other body. At any rate they are not finally ruled out. Undoubtedly an attempt will be made to raise the two questions. This is all bound up with the question of reparations, and the question of armaments also.
If we are to forgive France her debts to us, is she to spend the money, as she is doing now, in arming her satellite States, the new nations and little Powers of Europe? I do not think the British people will approve any such policy. At present France is more heavily armed, comparatively, than any nation has been in Europe for hundreds of years. Her actual military power is overwhelming. The danger is not on the French frontiers, but in the minds of the French people. I know that the real danger to-day is to Germany—the danger of being overrun by the black hordes which France can throw into German territories. As long as that fear remains you will have counter-arming and secret arming. The present Government should declare themselves on this question, and very clearly. That will be a lead which we could follow. Their record is not good. We have had a lead from the Senate and from the Congress of the United States. The United States has neglected deliberately to pass its Navy Appropriation Bill, and in consequence the whole shipbuilding programme of America is held up for 12 months. Owing to the earthquake the naval programme of Japan has been postponed for at least 12 months, and probably longer. What is the answer of the British Govern-
ment? Are they dropping a single ship under construction? They are not.

Mr. HANNON: Thank God!

Lieut.-Commander KENWORTHY: I do not know whether the hon. Member for the Moseley Division of Birmingham (Mr. Hannon) is now voicing the opinions of the majority of his constituents or those of the members of the Federation of British Industries. We are to have armaments and more armaments; that is all we will get from the bulk of the Conservative party. The enlightened members of it, such as the hon. Member for Plymouth (Sir A. S. Benn), who has just spoken, and the hon. Member for Farnham (Mr. A. M. Samuel), are in a minority, but the tail that wags the dog is composed of members of the type of the hon. Member for Moseley.

Sir A. S. BENN: The hon. and gallant Member must remember that I represent Plymouth.

Lieut.-Commander KENWORTHY: Of course the hon. Member represents a dockyard constituency and, like the Noble Lady his colleague in the representation of that ancient and beautiful port, he says, "By all means disarm in everything, but do not touch the British Navy."

Mr. HANNON: Hear, hear!

Lieut. - Commander KENWORTHY: Yes, the hon. Member opposite applauds that sentence. The British Navy can dominate the trade routes of other people. It can threaten the lifeblood of other people, but it is to be kept free. I am not in favour, however, of any uni-lateral disarmament. We have to show that we are prepared to do our part in this matter. As a matter of fact, our two principal naval competitors, if you like to put it that way, are the United States and Japan. Theirs are the only two navies which can in any way Imperil us, and they have dropped all shipbuilding for 12 months, but no reply has come from the. Government of my hon. Friends above the Gangway.

Mr. JOHNSTON: Singapore.

Lieut. - Commander KENWORTHY: Yes, Singapore is good, but the arguments used for dropping the Singapore scheme were that it was strategically unnecessary.

Mr. WALLHEAD: It is postponed.

Lieut.-Commander KENWORTHY: In any case I am referring to shipbuilding programmes and we have had no answering note from the Government to this very chivalrous action of the United States. I say it is chivalrous because they can afford these naval luxuries and we can not. Every day the Chancellor of the Exchequer has to refuse concessions to the aged poor, or to blind persons, or has to refuse to grant widows' pensions, and in such circumstances we cannot afford the luxury of cruisers which are not really required. The Government should endeavour to pass a Resolution of the House upon the same lines as the Resolution of the United States Congress, calling for a fresh Conference for the purpose of limiting those armaments which were left outside the Washington Convention, namely, cruisers up to 10,000 tons, the deadly and murderous submarines, and naval aircraft. It we can get such a Conference it might produce a great saving and a better atmosphere by stopping the new race in this type of armaments. Side by side with any concession we make to French feeling with regard to debts, reparations or security, we should continually bring up to France and to all our friends in Europe, the question of the mutual reduction of land armaments in Europe. Until we do that we cannot say that we are in any way removed from the danger of another terrible upheaval.
A real effort should also be made to prohibit the private manufacture of and the sale and traffic in arms and ammunition. Anyone who knows anything about these matters is aware of the enormous influence wielded by the armament-making industry. [Interruption.] The hon. Member for the Moseley Division, who speaks, I presume, for the Federation of British Industries, at once raises a protest when I refer to this question, but we know that hon. Members in this House quite openly speak on behalf of the armament industry in their constituencies. Perhaps I should not refer to him in his absence, but we know the hon. Member for Barrow-in-Furness (Mr. D. G. Somerville) advocates warship building for the relief of his constituents. It is not only a case of the capitalists who have money invested in armament-making firms being concerned, but there are also the employés and the satellites and all the
people for whom they provide work and wages interested in this matter, and until the private manufacture of and traffic in arms can be controlled, or, better still, abolished, there will always be an agitation for more armaments, which in the long run means an agitation for war. The Government should recognise that danger and take the necessary steps to meet it. At the present moment money which should go towards paying off perfectly just debts owed to us, in the same way as we at great sacrifice are paying off our debt to the United States, is in fact going to keep up armaments in France and in other countries with French money.
That is a matter which affects the British people very closely, and in regard to which we have a right to be heard in these Conferences. I should like to see a lead given in this matter by the Prime Minister or by the Under-Secretary for Foreign Affairs. They might not succeed at first in getting a response from the governing classes in those countries, but they would get a response from those whom President Wilson used to call the common people. That, man had the art of appealing to the masses and to the man in the street—to whom, in the end, the present Government, if they are friends of peace, and all friends of peace will have to appeal. May I conclude by quoting from a newspaper called the "Daily Herald," which cannot be accused of special hostility towards the Government? On the 29th March, in a leading article on the then reported resignation of M. Poincaré, that paper stated:
The policy of all capitalist countries 1s, in the last resort, controlled and determined not by the politicians but by the economic and financial powers whose creatures they are.
I ask my hon. Friends above the Gangway is that true? If it is not true let us have a lead from the Government in the direction I have indicated; let us have a real attempt to bring about disarmament by mutual agreement with a treaty of mutual assistance, and let us above all make a real frontal attack on this wicked armament making industry to which much of the evil of the present state of Europe can be traced.

Mr. WALLHEAD: I would have refrained from breaking in upon this Debate after the many eloquent speeches which have been made and the effective way in which various points have been
covered, were it not for the fact that this is the only occasion upon which a Member can make himself heard with regard to certain questions and I do not propose to allow this discussion to conclude without making my position perfectly clear because of the attitude I have taken up on platforms in this country for the last seven or eight years regarding these questions. Reading the newspapers of this country yesterday and this morning one gathered that we were going to have a most important Debate and it was pointed out that at least one Premier and three ex-Premiers would take part. Well, the Premiers and ex-Premiers have spoken and the amazing thing to me is that not one of them got down to the crux of the question. It has not been touched upon as far as the Front Benches were concerned. We have had eloquent speeches upon the ethics and the methods of conducting political conversations; the fringe of the curtain was lifted with regard to Chequers; doubt was cast upon the accuracy of certain communiqués and reports and in the earlier stages of the Debate I was reminded of a game of battledore and shuttlecock. As the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) pressed home his point I was reminded of a line of Omar Khayyam
Ah, make the most of what we yet may spend.
It struck me that the Opposition Benches were making the most they could of the little bit in the French Government's position with which they disagreed, because, to judge from the speeches from the Front Bench, one would think that the present position occupied by the Labour Government was merely a continuation of the foreign policy to which we have been accustomed, and as the Debate has proceeded it has appeared to be so except for what has been said on the Back Benches. I want to touch on a point or two with regard to the question discussed by back benchers, and it is gratifying to men like myself to listen to the growing volume of opinion backing up what we have asserted for so long, particularly when it comes from gentlemen who speak with knowledge and with information from the benches opposite. It is really being borne in upon responsible men that the whole policy of this
country and of the Allies generally with regard to Germany has been economically disastrous from the start. The people of this country were fed upon the grossest and most exaggerated stories which it was possible for politicians to utter. They have been led on from point to point, with most disastrous effects to themselves and the country generally, with a kind of will-o'-the-wisp of gigantic proportions. They have had German reparations dangled before their eyes for the last six years or more, and they have been led to believe that if they would only gain military victories, and stand the sacrifice required, they need not trouble about finance, that the whole question of national finance would be solved for them, because Germany, forsooth, was to be made to pay.

Lieut. - Commander KENWORTHY: They dared not say that while the fighting was on. It was only after the Armistice.

Mr. WALLHEAD: They said before that that we were to have ton for ton in ships, and there were plenty of indications that vast indemnities were to be demanded. After, I agree, when better counsels should have prevailed, when their former protestations should have been remembered, when eminent statesmen in this country, men who held in their hands the destinies of the world at that time, should have been thinking of what they had told the people of this country previously, they indulged in the wildest flights of imagination as to what they proposed to do. The people of this country had been told, first of all, that we were not at war with the German people, that the German people were a docile people, who had been led by a greedy, rapacious, and vicious crowd of politicians, and led by the Kaiser, like sheep to the slaughter. The Kaiser went. The Hohenzollern rule was ended, and I do not think it is likely to come back again. The German people at least showed their detestation of their rulers, and kicked them out, and then, instead of the politicians, who had egged on the people to fight for that object and had declared that the war was directed not against peoples but against certain guilty governors, acting on those lines, the whole effect of the peace has been to damn the peoples, while the governors themselves can still live in the luxury to which they have always been accustomed.
Then we began the peace negotiations, and we went from point to point, travelling from £24,000,000,000, through £12,000,000,000, down to £6,000,000,000. Why do you not make it £60,000,000,000? You will get the one as soon as the other, because you are not going to get your Dawes Report figure. I do not suppose that any sensible person or economist in this country believes for a moment that you will ever get it, but at least, while you are making the attempt, disaster awaits the people of the world, because that is what we are getting to now. The Prime Minister has told us that there is no question of the sanctions being operated until default takes place, and that then discussion will take place as to how these sanctions are to be operated It has been pointed out by M. Herriot himself that payments may extend up to 40 years, and I suppose we shall not know whether or not sanctions will be necessary until the last payment has been made. Therefore, not only this generation, but the next two generations must live in dread of what may happen if certain fulfilments of the Dawes reparation conditions do not take place. Two generations must live under the dread of what may possibly happen if default takes place, and thus we damn, not only ourselves, but our children's children with this fatal folly of attempting to punish.
I welcomed the speech of the hon. and gallant Member for Leith (Captain W. Benn), but there was one point with which I did not agree. I do not believe that Germany alone was responsible for the late War. I have always demanded revision of the Versailles Treaty, and I want to say that, no matter what the Government does, I shall still believe that revision is necessary. I do not agree to that policy, and I am not prepared to admit that what I have said with regard to the necessity for revision does not still hold good. I believe that it does. I do not believe that history will record the fact that Germany alone was guilty of this War. Wars do not arise in that particular way. As a matter of fact, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) told us himself, not very long ago, that the more he read about the origins of the War, the more disclosures that were made with regard to the contents of the archives of Foreign Offices, the more he became convinced that no-one willed the War, but
that we blundered and stumbled blindly into it. If that be true, it damns the whole basis upon which this miserable Versailles Treaty is built. If the world stumbled into this tragedy, then, in God's name, let us have somebody who is big enough to get us out of it without perpetuating the horrible mistake on which the Treaty is built.
Where are we going to get with this Dawes Report? It has been mentioned already that the operation of the Dawes Report means the enslavement of the German working class. We have had it indicated in discussions in this House already, of a preliminary character, with regard to the Washington Convention relating to the establishment of the 8-hours day. I understand that when the question of the 8-hours day, or the 48-hours week, was mooted some time ago at the International Labour Office Convention in Geneva, it was laid down clearly by the French spokesman that the 8-hours day would not refer to Germany, but that the 10-hours day was to be established there, and it was' accepted by the spokesman of the German Government that the 10-hours day should be established, otherwise Germany could not pay these reparations. In order to pay these reparations, in other words, the German working class, are to be enslaved and kept in a position of economic servitude more intense than that which exists at the present moment. The fact that they pay reparations here brings about the enslavement and degradation of their own working class. That is not a question that can be decided by individual employers. I make no impeachment against the employer's good will who regrets what has to be done. He is the creator of economic forces which he cannot control. There is something else to be said about that.
I am thoroughly convinced that this Report is for the purpose of attempting to place us upon an economic equality with Germany. I believe it was in August, 1922, that the right hon. Gentleman the Member for Carnarvon Boroughs made a speech in which he said that the effect of the depreciation of the German mark had been to wipe out German national indebtedness; that not only was she clear from debt from a national point of view, but her municipal debt had been wiped out also, and he said—I am not
quoting his exact words, but the sense of them—"I warn you that Germany free of debt, in competition with our country with a national debt of £7,000,000,000, is something that one cannot contemplate with equanimity." Depreciation has wiped out German national debt. It has wiped out her municipal debt, and we have a national debt of £7,000,000,000. I venture to predict that by the time you have got Germany in a position to pay the reparations which you demand in the Dawes Report, you will begin to consider that after all it is better to lose a war than to win it so far as economics are concerned, because it appears to me that industrial competition is bound to take place. From the economic point of view we are likely to find ourselves worse off than the vanquished. I want to raise my voice in protest against the pursuance of a policy that the Dawes Report contains. I believe that unless this Government or some other Government is prepared to say, "We shall have nothing to do with reparations whatever," there is no possible hope of escape for this country from the commercial point of view.
If the arguments put forward are correct and my own point of view is right, it seems to me the only way in which we can get on equal terms with Germany is to do something to wipe out our own National Debt. That is exactly the proposal of our party, because, if you do not wipe out your National Debt your own business men are recognising that you cannot possibly compete. You may attempt to punish Germany as much as you like, but the goods will come in, and in an attempt to place a burden on Germany that will equal your own National Debt, you cannot do that unless you allow her to send goods into this country. In either case we shall be defeated so far as our own people are concerned. There is no escape as far as I can see. Therefore I want to add my view to the powerful pleas that have been made that common sense shall be the rule in the councils of Europe so far as this vexed question is concerned. I would back up the plea of the hon. Member for Dundee (Mr. Morel) that some man might arise who would find a backing in this country. There are millions of people in this country who have looked to man after man, but always
failure has been the result. If only some man had arisen who had determined to look at this question, not from the point of view of the military victors, not from the point of view of the commercial nation fearing again the rise to economic power of a dread rival—if only some man could have arisen who could have read history aright, if only the policy of reconciliation could have been pursued instead of the stupid policy of vengeance and punishment, there might have been hope for the world after all. I cannot see there can be hope for the peoples of Europe as long as the present policy is pursued.
What security can be obtained by nations to-day against modern methods of warfare? It is no good looking to a river or a range of hills for security to-day. The North Sea has become a ditch. What with under-water and over-water methods, what with the power of transporting potent poisons quickly and showering them thickly on defenceless populations, it is no use looking to frontiers for security. Security can only come when nations begin to rid their minds and souls of the idea of vengeance. You cannot gain security by military armaments. I want to add my voice to the other voices that are being raised on this matter. I thank whatever gods there be that, all over Europe and all over the world, there is an increasing number of people who are seeing the hatefulness of old policies and are doing what they can to apply new policies. There is a vast number of people who are ridding their minds of the idea that militarism can bring safety. I welcome the gesture which has been made by the Premier of Denmark—a small country, it is true—but he has seen the futility of armaments in order to make his country safe. He knows that without armaments he will he safer than if be had them. I believe many of those questions should be referred to the League of Nations, which is not already perfect. We could work in that direction and make it as good as we possibly can. Any question that can be referred to them should be so referred. At least we should make it perfectly clear to all those who wish to stand as allies with ourselves in the attempt to resettle and bring peace to Europe that we would have nothing to do with policies composed of hatred and vengeance.

Mr. J. HARRIS: I should like to say that I have listened with some alarm to the suggestion made in this House to-day that the Treaty of Versailles is to be regarded as a kind of sacrosanct instrument. The whole tenour of the Debate, I think I may say, from all the Front Benches has been rather to support the Prime Minister in his appeal in which he urged us to be exceedingly careful how we suggest that any attempt be made to in any way review the Treaty of Versailles. I do not understand that at all. It is a most extraordinary position to take up. Are we for ever to have that Treaty tied round our necks? Are we never to consider any modification of it? It occurs to me that those who are saying that have never taken the trouble to read the Covenant of the League of Nations, which provides for the reconsideration of the Treaty. What are we going to do if some day someone of eminence puts forward a definite proposal at Geneva that the Treaty of Versailles should be reviewed? Again and again in Geneva the question of the revision of Treaties has been discussed, and it has always seemed to be one of the most healthy features of the Assemblies of the League that matters which are usually regarded as only proper to be discussed in the corner in the dark are always discussed there with perfect frankness, openness and friendliness. I am not going to say we can never contemplate any reconsideration of all or any part of the Treaty of Versailles. Another matter with which I want to deal this evening is the suggestion made by hon. Members above the Gangway that the question of reparations, or rather of dropping reparations, has never been dealt with by any of our Front Bench seen. Let me clear up that point beyond question. The first pronouncement made at Paisley by the right hon. Member for Paisley (Mr. Asquith), when he was fighting his first election there, and in that capacity was setting forth the policy of the Liberal party, was to this effect:
It is important, no doubt, that Germany should make reparation for the wrong she has done. It is almost equally important—I am not sure if it is not more important for the permanent interest of the world to accelerate, as far as you possibly can—the restoration of the normal economic life of Europe, of which Germany is and will continue to be a most important factor.
Then the right hon. Gentleman went on to quote a speech by Mr. Walter Leaf, who, addressing his shareholders at the annual meeting, said:
The country must learn to recognise that the attempt to annihilate Germany by preposterous demands for reparations will hurt ourselves far more than it will hurt Germany, and will mean not only economic but the social suicide of Great Britain.

Mr. WALLHEAD: I do not want to carry this discussion too far, but is it not a fact that these words were used at a later date?

Mr. PRINGLE: No, it was in 1922.

Mr. HARRIS: I am dealing with a policy which was quite clearly put forward by the right hon. Member for Paisley at the time I have mentioned, and it is set forth in the clearest possible language which he who runs may read. He did not stop there. As to the point raised by the hon. Member above the Gangway (Mr. Wallhead) I am not complaining of it, I am only trying to show, as a matter of fact, that a Front Bench statement was made which set forth the view of the Liberal party as regards reparations at that time. Later on, speaking in this House, the right hon. Gentleman, the Member for Paisley said:
As I have said, that is no new opinion of mine, because, speaking as far back as February, 1920, two-and-a-half years ago—a long time in politics—when I was a candidate for Parliament, I said that for my part, and I should not be at all surprised if the Chancellor of the Exchequer, now the Lord Privy Seal, agreed with me, if I were budgeting in the future I should write them off, and I have always been of that opinion. They are not good debts, not from any want of honour or good faith on the part of those who incurred them, but without incurring something very nearly approaching national bankruptcy they are not in a position to redeem their obligation. To remit, in my opinion, is not an act of magnanimity in the least. It is an act of good business."—[OFFICIAL REPORT 3rd August, 1922; cols. 1751–2, Vol. 157.]
I only refer to these two passages in order to lead up to the points I particularly want to raise with the Government to-night. They are points which I have frequently attempted to raise in this House during the last few weeks. The first is that we are now going into a Conference in which not merely the whole world, but in which throughout the length and breadth of this land there is most intent interest and anxiety, and I would like to ask the Government again what
steps they propose to take to keep public opinion in touch with the developments which will arise at this Conference? We have been told that the Conference will probably last a week. That is a very optimistic suggestion. I believe that it will last weeks and not a week. The hon. Member for West Woolwich (Sir K. Wood) shakes his head. Perhaps he thinks it will only last a few days. If it only does that it will be followed by another Conference, and the same argument therefore applies. I want to make an appeal to the Government to treat the public of this country in the openest possible manner with regard to every development connected with this Conference. The Prime Minister referred to the phrase "open diplomacy" as a parrot cry. Parrot cry or not, open diplomacy has established itself as a successful form of procedure in international politics. An hon. Gentleman asks where. I will tell him. In 1920 the Council of the League of Nations met for the first time. It met behind closed doors, and any suggestion that those doors should be open to the public and to the Press were regarded with the utmost horror and distrust. We were asked to consider all the difficulties that would arise, the misunderstandings and the dangers that might follow from hasty expressions of opinion, but, ultimately, the view prevailed that those Council meetings would be better held in public.
What happened? They started very nervously with one Council meeting in public. Lord Balfour, I believe, was opposed to holding the meetings in public, but acquiesced in the opinion of the majority, and in the pressure which had been put upon the Council. The first meeting was so successful, that it was decided in future Council meetings should be held in public. It is no use saying that delicate international problems have not been discussed before the Council. They have, again and again. The problem of Poland and Lithuania, which, as everyone knows, was an extremely complicated one, led to a great deal of heat, a great deal of strong feeling, bet never again were the doors of the Council closed to the discussion of that particular subject. Then, last year, what could have been more delicate than the discussion of the Grmæo-Italian difficulty over Corfu? That, again, was discussed in
public. No inconvenience has arisen from that, no embarrassments, no misunderstandings, and I think it fairly safe to say that nobody to-day would go back on the bad old policy of always discussing these things behind closed doors.
I would like to repeat what my hon. Friend the Member for Dundee (Mr. Morel) has said, that, of course, when we are pressing for open diplomacy in these matters, no one suggests that there should not be preliminary conversations and preliminary arrangements. The appeal I am endeavouring to make to the hon. Gentleman is that they should, hold their principal conferences in the light of day. If they feel unable to do that, may I urge, as an alternative method, that the practice of the Conference at Lausanne, which was also very successful, should be adopted in this case? In that case, as the hon. Gentle-knows, a competent official attending the Conference, immediately the sessions were over, met the Press, and gave out a full and frank statement of what had happened at that particular Conference, and in that way the public was kept informed. Therefore, I would appeal to the hon. Gentleman to consider by what means they will be able to take the public into the fullest measure of their confidence during the Conference.
There is another matter, which I have raised again and again with the hon. Gentlemen on the Front Bench. Again and again, during the last six months, I have pressed for a statement by the Government as to their attitude with regard to the International Court of Justice. May I remind hon. Members that Great Britain has never yet given full adherence to the International Court? We were parties to the creation of the Court, we had one of our own eminent jurists sitting upon the committee which prepared all the machinery for that Court, and yet we have never to this day taken the final step of giving our wholehearted adherence to the International Court of Justice. The Court was created by reason of the Covenant. The committee for creating the machinery met in 1920, the machinery was accepted and passed by the Assembly in 1921, and in 1922 the Court was completely organised and capable of hearing cases submitted to it. There is in the Protocol of the International Court of Justice what is known as Article 36. This gives an op-
tion to the Powers to agree to compulsory jurisdiction within certain limits. Those limits—there are four of them—are as follow: 1, That we would agree to accept automatically, compulsory arbitration upon the interpretation of a Treaty. Why should be fear that? 2, On any question of International Law. Why should we fear arbitration on any question of International Law? 3, The existence of any fact which, if established, would constitute a breach of International engagements. Why fear that? 4, The nature and extent of the reparation to be made for the breach of an International obligation.
I do submit that Great Britain has nothing whatever to fear in accepting those four conditions of international arbitration. Up to the present 47 States out of the 54 members of the League of Nations have agreed to support the International Court of Justice, but up to the present only 21 have accepted the optional Clause on compulsory jurisdiction. Although the Council themselves framed the instrument, they have left it to the smaller Powers. Only one member of the Council has agreed to accept, and that is Brazil, and, I believe I am right in saying, Brazil has accepted on condition that Great Britain should agree to accept. I hope the hon. Gentleman will tell us presently whether it is true that Brazil is the only member of the Council agreeing, and whether its agreement is subject to that of Great Britain. This much I say without fear of contradiction, that if Great Britain were to agree to accept the optional Clause for compulsory jurisdiction within the sphere I have mentioned, she would give such a lead to the whole world as would enormously advance the cause of peace and goodwill throughout the world. Surely it should be possible, after all we have gone through, for our Government to tell the League of Nations Assembly, next September, through the mouth of our Prime Minister, that Great Britain is prepared to give a lead to the nations, and declare that she is prepared to accept the law for the settlement of international disputes.
If the Government are unable to accept that Clause as it stands, then, as the hon. Gentleman knows, it is open to us to accept it with limitations. We can accept it for a period of years. We can
accept a jurisdiction more restricted than those four points I have mentioned. We can accept two; if we like, we can accept, one. But my appeal to the Government is that they will agree to accept for a period of years the whole four. There is nothing that we can do which would so tend to strengthen the position of our country amongst the nations of the world than when meeting together next September to give a full and whole-hearted adherence to the protocol of international arbitration. There is no use disguising the fact that recent actions have caused a good deal of concern as to the attitude of the present Government. I am confident, from the reading I have been able to undertake, that the decision to build the five cruisers has had a profoundly disturbing effect throughout Europe. [HON. MEMBERS: "Oh, oh!"] Perhaps after the Recess hon. Members will allow some of us to send them some material to read, and they will then learn what we realise, the disturbing effect which this decision to build vessels of war of the most powerful type has had upon other countries. Here is a chance next September to declare that we will, to save time, adhere to—

Mr. HANNON: Has it not been again and again stated in this House that the ordering of the five cruisers was to make up the deficiency that existed?

Mr. HARRIS: My hon. Friend knows that the first explanation was that these ships were to make up a deficiency. Then we had the statement of the Financial Secretary to the Admiralty that the ships were laid down in view of the serious state of unemployment, this in respect to the class of cruisers which admittedly had been scrapped for years!

Mr. BLUNDELL: Was it not, as a matter of fact, according to the statement of the Financial Secretary to the Admiralty that the building of these vessels was merely being accelerated?

Mr. HARRIS: My hon. Friend may prefer that statement if he pleases. But he will realise that we get to this point: that there are 54 members of the League of Nations, of whom, may I remind him, we are one, who have signed a solemn covenant that we will reduce out armaments to the lowest point consistent with national safety. We have departed from that. [HON. MEMBERS: "No!"] Hon.
Members say "No!" That is what I think, and that is the opinion of eminent people who have studied the situation. In conclusion, I hope that the hon. Gentleman the Under-Secretary for Foreign Affairs will be able to give us some assurance in regard to publicity during the Conference; and in regard to the question with which I opened my speech—our willingness to co-operate wholeheartedly in the work of the League, more particularly in those directions which would impress the world as an alternative to methods of warfare, namely, the settlement of international disputes by means of judicial arbitration.

10.0 P.M.

Mr. PRINGLE: The Committee has enjoyed a very interesting Debate this afternoon, which has had this peculiar characteristic, that while there has been unity on the Front Benches in accepting, as of a sacrosanct character, the Treaty of Versailles, there has been on the part of Member on the back benches in all parts of the House a general attack upon that instrument. The House has been treated to a Debate very much like the Debates which occurred during those five years in which we have had an atmosphere of make-believe and pretence. It is only on the Back Benches that you will find those who, in a sense, have been living in a palace of truth. Listening, with great care, to the speech of the Prime Minister I was anxious to ascertain the precise policy with which he is going into the Conference. But the impression on my mind was that of a Celtic twilight. It seemed to me we were living much as in the old Coalition era: that one Celtic performer had gone, and had been succeeded by another Celtic performer. It is quite true that we have had a certain antagonism between the Celts, and probably if the right hon. Gentleman opposite had made the speech, made from this side, it might not have beer very much different, but at least it would have been more intelligible. On this occasion, I have heard only one speech from the other side of the House in which the policy of reparation has been defended. I think that is most significant, that it has been left to the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) to defend the policy of reparation in the old sense. He
endeavoured to make a reply, and, so far as I heard what he said, it seemed to me to be a most inadequate reply to the speech of my hon. Friend the Member for West Stirling (Mr. Johnston). I was surprised, for I never associated the Member for West Birmingham with that view. I thought that even in the Coalition Government the old theory of reparation had been abandoned. The right hon. Winston Churchill made a speech in that sense sc, long ago as 1921. I thought that, as a colleague of the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain), Mr. Churchill would be expressing the general view held by the Coalition Government. This passage deserves to be read, because it is marked by all picturesque qualities so characteristic of the rhetoric of Mr. Churchill. In November, 1921, Mr. Churchill said:
He was delighted to see the steady, remorseless march of statesmen of all countries during the last few months towards financial sanity—
This was a march in which the right hon. Gentleman the Member for West Birmingham has not shared. He continued:
The nonsensical froth, not only of politicians, tub-thumping at elections, but of financial and grave members of the judiciary, about extracting £20,000,000,000 from Germany, has reduced itself to a much more practical statement of our case. He rejoiced to say that the simple fact that the payment from one country to another could only be made in the form of goods or service had once mere become recognised by the most enlightened experts in different countries.
It was precisely for stating that doctrine that the right hon. Gentleman the Member for West Birmingham attacked the hon. Member for West Stirling (Mr. T. Johnston). It is precisely because reparation can only be paid in goods and services that hon. Members not only above the Gangway here, but on those benches opposite, the hon. Member for Ilford (Sir F. Wise), the hon. Member for Farnham (Mr. A. M. Samuel), and the hon. Member for Plymouth (Sir A. S. Benn), have all agreed in attacking the policy of reparations. I had hoped that now we had a Labour Government in power that the new policy would emerge. The Prime Minister told ns at the very beginning when he was on the threshold of the Foreign Office that there was to be a new spirit and a new method. I also remember some of the speeches of
his colleagues before the Election in which they denounced the folly of the reparations policy, the illegality of the occupation of the Ruhr, and of the occupation in fact of any German territory. There were many hon. Members on these benches who shared the hope that the Prime Minister would have done something to put those views into operation. After all, what difference has the General Election made? Would the right hon. Gentleman the Member for Bewdley (Mr. Baldwin) have put a different policy forward to-day from that which the Prime Minister has placed before the Committee? I am not so sure that from an economic point of view the right hon. Gentleman the Member for Bewdley has sounder views than the Prime Minister, because he did recognise that if reparations are received it will be necessary for this country to become Protectionist.
I desire to congratulate the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) on the vindication he has received from the Treasury Bench to-night. It has only been in the past the right hon. Gentleman the Member for Canarvon Boroughs who has described the Treaty of Versailles as not being sacrosanct, and he has always maintained that it was an instrument which should be revised, and now he has received as a supporter and follower, the Prime Minister. The hon. Member for Dundee (Mr. Morel) talks about the apotheosis of the old diplomacy, but we have had a kind of the apotheosis of the right hon. Gentleman the Member for Carnarvon Boroughs to-night at the hands of the Prime Minister.

Mr. DICKSON: Is the hon. Gentleman entitled to use Gaelic?

Mr. PRINGLE: If I had been using Gaelic at this time of the night the hon. Member would not have understood it A number of questions have been raised to-night showing that the Labour stands in a peculiar position in regard to reparations. Hon. Members have questioned the policy of the expediency of reparations, and we have heard arguments to the effect that this policy, if it were carried out, was going to inflict injury on the industries of this country and that was the sole argument. The Prime Minister was not content with saying that repara-
tions, if carried into effect, would be disastrous, but he also held that the whole policy was immoral. The junior Member for Dundee (Mr. Morel) shared that view, and stated it very clearly and very forcibly to the Committee this evening. The same point was also put by the hon. Member for Merthyr (Mr. Wallhead) who said that the policy of reparations rested on the theory that Germany was solely responsible for the War.
I am not going to argue that point, but it was the theory held by the hon. Member for Dundee, the Prime Minister and the Under-Secretary for Foreign Affairs, and they hold that the policy of reparations would not only be disastrous in its effect but that it was immoral. The question whether a policy is injurious may be open to argument, and the putting of such a policy into operation may be expedient, but if it is immoral then you have no right on any ground of expediency to lend yourself to any proposals which will carry that policy into effect. That is why I cannot understand why the Prime Minister now associates himself with the Dawes Report, the object of which is to carry out a policy of reparations which is to exact £125,000,000 a year from Germany. I cannot understand how this Government, with the Prime Minister at its head, and with the present Under-Secretary of State for Foreign Affairs, assents to the carrying out of an immoral policy. I think that is a matter which requires some explanation from the Front Bench.
There are other questions which arise in this connection. The question of the occupation of the Ruhr is bound up with the acceptance of the Dawes Report. We are told that economic and political sovereignty of Germany is to be recognised over all German territory, but that is apparently to involve the military evacuation of the Ruhr. The Prime Minister holds that the occupation of the Ruhr, both from the economic and military point of view, was illegal under the Treaty of Versailles and every right hon. Gentleman and hon. Gentleman sitting on the Treasury Bench assented to that view. I remember the Government of the right hon. Gentleman opposite (Mr. Baldwin) was attacked with great vigour because he failed to raise the question of the legality of the occupation of the Ruhr at the time it was under-
taken. We became aware of this in the month of August last, written by Lord Curzon, who informed us that the late Government regarded the occupation of the Ruhr as illegal and I believe that was announced on the 11th August. If the late Government and if the present Government regard it as illegal why did they not use the machinery laid down in the Treaty for deciding that legality? While the late Government were not to blame for not having made use of that machinery, the present Government should bring it into operation for testing the legality under the terms of the Treaty. Otherwise the proceedings carrying out this Report and the success of the Conference are not very bright.
Then there is the question of the position in regard to the left bank of the Rhine. To my mind, that is even more important than the question of the occupation of the Ruhr. It was raised to-day in the speech of nay right hon. Friend the Member for Paisley (Mr. Asquith). He asked whether the terms of the Treaty were to be carried out in regard to the partial withdrawal from the left bank of the Rhine five years after the Treaty came into operation. That is a most important issue. As my right hon. Friend said, the. French claim that the time has not begun to run at all. On the other hand, every Government in this country since 1918 has held that the time has begun to run. We should like to know from the Under-Secretary whether, in the view of the present Government, the five years have begun to run. Statements have been made that engagements have been entered into with the French—I do not know whether there is any truth in them or not—engagements whereby this question is not to be raised. I believe it to be, however, the most important question of all—the question, in ether words, whether, in the sector of the Rhineland that is occupied by our troops, our troops are to be withdrawn in January of next year.
At the present time there is an additional case, from the French point of view, that withdrawal should not now take place under the Treaty. They can hold that, a default has been declared by the Reparation Commission, and that, as there has been a default, consequently there should not be the partial with-
drawal provided for under the Treaty. Immediately this question arises: Is the default which has been declared by the Reparation Commission to be cancelled if the Dawes Report is accepted and put into operation That is a matter which, obviously, must come up at the Conference, because it seems to me that neither from the point of view of Germany nor of the Allies can the acceptance of the Dawes Report be treated apart from its effect on the previous default which has been declared by the Reparation Commission. Can the Under-Secretary give the Committee any information on this point? Has any agreement been made that, if the Dawes Report is accepted, the default which has been declared will be cancelled, and that, therefore, when the five years come to an end, there will he the partial withdrawal provided for in the Treaty? Or is the question going to be raised in the course of the Conference with a view to having the matter settled once and for all, because of the necessity of having it settled before January next?
The obvious line to take on the part of this country is to see that a settlement is made now. If the Dawes Report is to be accepted, obviously the occasion of its acceptance should be made an opportunity for fixing definitely that the withdrawal should take place in January next, and that not only should this with drawal take place, but that the complete withdrawal should be effected in the course of 15 years. Very few people in this country understand why it was that the question of default in reparations was associated with the question of the occupation of the left bank of the Rhine. The documents which are included in the Blue Book dealing with security reveal the French point of view on this matter. It is clearly shown that Marshal Foch, representing the general opinion of the French people, demanded, in January, 1919, that the German frontier should be pushed back to the right bank of the Rhine. That was the demand made at the Conference, and it was supported by M. Clemenceau and the other representatives of France.
That demand was refused both by President Wilson and by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George); but, after it was refused, the French representatives en-
deavoured to secure their object by other methods. When the proposal was made for a temporary occupation up to the left bank of the Rhine, it became the object of the French negotiators to insert conditions in the Treaty by which that withdrawal would be prevented. Two conditions were inserted. One was that there should be in existence the military guarantees which were provided in the Anglo-American-French pact, and the second was that there should be no default in reparations. Now the position is that a large number of people believe that neither of those conditions has been fulfilled. First of all, there is no pact, owing to the failure of America to ratify; and, secondly, a declaration of default has been obtained from the Reparation Commission; and, as neither condition is now fulfilled, the French contention is that they are entitled permanently to occupy up to the left bank of the Rhine. It is very important that the Government should make up its mind on this matter because this goes to the root of the whole problem. We hear a great deal about French security, but French security has always meant the left bank of the Rhine. It is not new. It did not begin in 1918. There was a secret Treaty between the present President of the French Republic and the Russian Secretary for Foreign Affairs in 1916, in which the Russian Government agreed to France's occupation up to the right bank of the Rhine. It is often forgotten in these days, but in those clays he was acting on behalf of the French Government, and that is one of the secret agreements—I think the hon. Member for Dundee (Mr. Morel) will bear me out—made during the War to which the Government of this country was not a party, but it was an agreement made between the Tsarist Government and the present President of the French Republic, representing the French Government of that day. It represents a historic French ambition. It goes back beyond 1870, and you will find that politicians of all parties in France—Republicans. Buonapartists, Royalists—all alike have set this ambition before them, and undoubtedly under this sacrosanct Treaty of Versailles the French now have an opportunity of realising that ambition. I claim that when we are discussing this matter of reparations and the default which has already been declared it is of
the most urgent importance that the British Government should make its position clear in this matter, that it should show that it will give no countenance to the French interpretation of the Treaty and what has occurred since the Treaty, because if any countenance is given to that interpretation we may all say farewell to the peace of Europe and look forward with certainty to another war.

Mr. HARDIE: I wish to draw attention to the reasons why the Back Benches find themselves in the position they occupy to-day. From the first time peace was talked about up till now the Labour party cry was "no annexation and no indemnities." That was the basic cry of the Labour party viewing the possible settlement after hostilities had given place to peace. It would be pardonable for anyone looking on and taking an interest in what is taking place to believe that France has not been convinced by the other members of the Entente as to the evil of taking reparations, and that the other parties to the compact have agreed to take reparations in order to bring home to France in a practical way what suffering reparations can bring. That may be the method adopted by the men at the top, but even if that form of arrangement is taking place it ought to be made public. If France is stubborn in any point and will not be convinced, it ought to be a question of a statement in this House or the other House of Parliament. In the Dawes Report you have specially mentioned coal, coke and dyes. In this House it is very difficult to get people interested in actual facts. The interest seems to be in any unattached abstract thing that does not nail anybody down to anything. During the last week we have had a still-born book, and the father of the book is the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). The right hon. Gentleman desires, on the one hand, reparations, and on the other he publishes a hook to show that to-day in this country the condition of the coal trade is so bad that in many districts two or three days' work per week is all that the miner can get. Nevertheless, he comes to this House and talks about getting coal from Germany. If he had a logical mind, which he never has possessed, he would say, "Yes. I am taking reparation coal from Germany and I am going to sell that
coal in place of the coal that our miners would have produced, and I will pay our miners full wages while they are idle." That is the proper way to take an indemnity from another country and yet benefit our working classes. The right hon. Gentleman has so little understanding of British industry and British products that he does not realise that we have 1,300 coke ovens standing idle in this country, and that the workers are on the dole. Yet we have a combination of our present Prime Minister and ex-Prime Ministers wanting to bring in coke from Germany, although our coke ovens are shut down and the men are on the dole.
Now we come to the question of dyes. This question has never been really faced in this House. No matter who has been answering questions from the Government Bench since 1922, every question in relation to dyes from Germany has been met with an evasive answer. There never has been a straightforward, honest answer in relation to German dyes. We cannot get any honest reply as to whether or not the dyes that come from Germany are in their last stage or whether they are basic dyes from which dyes can be made. We cannot get that information. Now the Dawes Report specifics that dyes should be one of the things to be brought in. The right hon. Member for Carnarvon Boroughs was responsible for spending millions of the taxpayers' money in helping to build up dye-works and dye-plant in this country and in Scotland. Now he wants to destroy the industry which he was seeking to build up, by bringing in from Germany the dyes which he said should be made in this country.
As to the loan of £40,000,000 it has been stated that that loan is not a serious matter and that it will be good business to hand out the £40,000,000 to Germany and cut it at that. It would be a good thing to pay £40,000,000 to Germany to present her going us more harm by reparations, because, without doubt, once you begin to take reparations Germany is going to hit you much more than she did in the War, and that was badly enough. Suppose you admit reparations coming in, what form are these payments to take to make it possible for this country to deal with them and yet keep our internal markets as they are? Not one of the
Members who are taking part in this Debate has faced that question. There is much airy talk of how you can bring in and send out, but you cannot bring in and send out unless you destroy your present markets or the markets you are looking for in new industry.
Suppose you bring in locomotives from Germany. Here are orders waiting for 4,000 locomotives in Roumania, but the reason we cannot send locomotives to Roumania is because it is stated that Roumania owes us money. But here we are prepared to take coal, coke, dyes and anything else from the country that does owe us money. If it be right to hand out £40,000,000 in order to help Germany to destroy this country by paying reparations, why should Roumania be denied these 4,000 locomotives which might be the means of paying the money which she owes to us? There is a number of us on these Back Benches who are not politicians. That is to say we are not of this opinion to-day and of another opinion to-morrow. We have always believed in the policy of no annexations and no indemnities and in working for a peaceful settlement. We still hold to these opinions and if a Vote is taken tonight we shall have the greatest possible pleasure in voting against the Government.

Question put, and agreed to.

CLASS V.

DIPLOMATIC AND CONSULAR SERVICES.

Motion made, and Question proposed,
That a sum, not exceeding £640,178, be granted to His Majesty to complete the sum necessary to defray she Charge which will come in course of payment luring the year ending on the 31st day of March, 1925, for the Expenses in connection with His Majesty's Embassies, Missions and Consular Establishments Abroad, and other Expenditure chargeable to the Consular Vote, including a Gift to the Imperial University at Tokyo. Relief of Refugees in the Near East and certain special Grants."—[Note: £550,000 has been voted on account.]

Mr. HANNON: I beg to move, "That Item O [Office expenses and Fee allowances] be reduced by £100."
I do so in order to have an opportunity of calling attention to the need of more efficient organisation of our Consular services. This is a very sudden departure from the Debate which has just taken place, but the Committee will realise that if this country is to maintain its com-
petitive power against countries abroad, its Consular and commercial services ought to be of the highest quality During the past couple of years, in company with certain of my hon. colleagues in this House, I have had the opportunity of seeing something of the Consular administration in almost every country in Europe, and I say at once that it is the worst possible kind of economy to reduce to the level almost of inefficiency the provision made by Parliament for the maintenance of the Consular service. Hon. Members will recall that, before the War, the expansion of German commercial influence throughout the world was very largely due to the vigorous organisation of the German consular service. The German consular agent in practically every part of the world became a sort of official commercial traveller for the products of Germany. He took an active part in promoting German interests in trade; he considered the requirements of the particular locality in which he was placed, having regard to what Germany could produce for that particular market. He looked after the establishment of German financial influence in his particular area, and was, indeed, not the least important of the great multitude of agents employed by Germany for the development of her immense economic importance in the world.
I am afraid that in this country we have not appreciated the value of the consular service in the same way as it has been understood and valued by other countries. Let me point out, as an instance, that in the Estimates of the current financial year, the total provision for expenses for the whole consular service of Bulgaria is only £276. I am not referring to the salaries of the two Vice-Consuls; I am speaking of the expenses appropriated to these two offices. In a country like Bulgaria, with its great potentialities, with every possibility of and desire for the development of trade with Great Britain, as our past experience of Bulgarian trade has always been satisfactory, all the provision that the Government is making for looking after the trade interests of Great Britain and the overseas Dominions in that important new country which has arisen out of the War is a provision for expenses to the tune of £276 a year. It is almost laughable that the Government
should be a party to the provision of so miserable a sum. On the other hand, take Czechslovakia. I had an opportunity, with my hon. Friend the Member for West Lewisham (Sir P. Dawson), of being twice in Czechslovakia during the last 18 months. We found everywhere the most intensified effort being made on the part of countries competing with ourselves, to get control of the markets of Czechslovakia. We found there the French, the Italians, the Swiss and the universal American bagman. What are we doing to keep our manufacturing community in contact with this part of the world? We are spending in that very live country, which has an intensive industrial organisation of its own, the sum of £2,790. I say to the Committee and to the public outside that if we are really serious in our efforts to keep British manufacturers on anything like the same level of efficiency as other countries, thus maintaining the standard of employment for our people at home, we must take a step forward by increasing the efficiency of our consular service.
Take the case of a country like Esthonia. Esthonia is one of the new nations which has arisen since the War, but it has preserved its traditions through 700 years of bondage. In spite of all the ravages which devastated that country in the wars between Russia and Sweden, in spite of the aggressions of the Baltic barons and a series of attacks extending over many years, that little country has preserved its national sentiment and its industrial vitality. Qualities of that kind should make a strong appeal to hon. Gentlemen opposite, and they may be interested to know that the total sum provided in consular expenses to enable British commerce and industry to be adequately represented in Esthonia is £411. Why, a commercial traveller going to a city like Reval representing a respectable British firm, would be allowed as pocket money more than the great. British Government allows to its consular representative to enable him to discharge his duties effectively and efficiently there. Then take the case of a country like Finland which in the matter of consular administration is one of the jokes of our consular service. We have there a number of vice-consuls established at various centres, and they receive no salaries, but the amounts
allowed to these gentlemen for the discharge of their functions as representatives of British interests are remarkable. One gentleman enjoys the happiness of receiving £45 a year; another £25; another £9; another £8; another £7, and another £5. It may be said that these small contributions are for specific purposes, such as postage, but is it proper in these communities, if we are really serious in helping our manufacturers to sell our goods, that we should employ local residents in an honorary capacity at centres of distribution and pay them miserable pittances of this kind? Would it not be better to employ a competent and energetic man to promote the sale of our products instead of leaving us at the mercy of every competitor who conies to those parts prepared to spend generously of his nation's money in selling his nation's goods?
Just recently everybody noted with satisfaction the loan to Hungary, and this country was the principal factor in having that loan satisfactorily negotiated. The total amount provided as expenses for our Consular Services in Hungary is £457. The total amount paid in salary to our Vice-Consul there is £850 a year. Having given our prestige to the flotation of this Joan, which everybody agrees is necessary for the development of that interesting country, a country which offers tremendous possibilities, is it not ridiculous that we should have our trade representation in that part of the world conducted at the expense of a few hundreds a year? Why cannot the Under-Secretary realise the importance of having highly trained, really competent, commercial representatives in a country of that sort We are lending £8,000,000 to Hungary, and we hope that a considerable amount of that money will be spent on the purchase of materials here, yet we have not a trade representative there, except a Consul-General, who gets no salary at all, and a Vice-Consul getting £850 a year. In Latvia we have a Consul-General at Riga, who receives a salary of £1,350 a year, and he gets £770 as expenses to look after the whole of the interests of the British in that country. When I was at Riga, I found that man struggling against the greatest difficulty in trying, at his own expense, to entertain visitors and to keep in o touch with representative people, doing
all he could to attend agricultural and industrial shows, and yet he could not get a farthing more than the miserable sum allotted by the British Government to enable him to carry on this work. That parsimonious policy of limiting the opportunities of our agents abroad to spend money so that British manufactures may be sold is stupid and foolish.
The present Government are not the only sinners in this matter at all, because the preceding Governments have been as great sinners, and we on this side of the House who are interested in commerce and industry have often appealed to my right hon. Friend on the Front Bench to do something in this matter. Look at the condition of our Consuls in South America and at the miserable amount that we are spending on our Consular services there. You have the Pan-American organisation at Washington, using every opportunity to extend the influence of American commercial prestige in every Republic in South America, and all this time we are doing practically nothing. Our staffs are efficient. I believe that our Consular servants, on the whole, are the finest body of men in the world, but what can they do when their hands are tied and they are without the necessary financial support? All this cry of economy in the public services, when it is a matter of giving the necessary financial support behind the Consular service, is a most stupid policy, and we ought to be no parties to cutting clown such a service as this.
If I take a further country which I have had an opportunity of seeing, namely, Poland, I find that our total expenditure there—we have two Consuls, one at Warsaw and another at Posen—is about £900 on salaries. Here is Poland, a great new country, with vast opportunities for trade, and we are spending only this small sum on our Consular service there. In the City of Warsaw there are as fine spinning mills as we have in this country, and here are these great centres of trade overrun by French commercial travellers, are? Germans, Italians and Swiss, and what is the Government trade organisation there doing? I am sure that this Committee would loyally support the Under-Secretary if he were to put forward a really live and vigorous policy in relation to the strength of our Consular services. Take a country like Jugo-Slavia, which the hon. Member for West
Lewisham (Sir P. Dawson) and myself visited the other day. Jugo-Slavia is a congeries of nations which belonged to the old Austrian Empire, combined with the old Serbia, and, believe me, the wealth of that new Empire, because it really is an Empire, consisting of a series of old Austrian kingdoms, Dalmatia, Montenegro, Herzegovina, Bosnia, Croatia, Slavonia, is enormous. These make up a new empire of profound economic consequence to Europe, with immensemarkets and great natural resources. What are our Government doing to extend trade there? The Vice-Consul at Belgrade is given to spend on the development of British trade in the current financial year £400. In a city like Belgrade, the capital of a new Empire, where British interests at every moment crop up, how can he meet the deputations, attend the various functions, do things which are necessary and which anybody with anything to do with commercial interest understands, when he is limited to spending a miserable £400 a year. The whole thing is a penny wise and a pound foolish, policy. The Vice-Consul at Ragusa is a remarkable example of what a capable man can do for British trade. On his own initiative he is getting in touch with various agricultural and other interests, and doing much to advance trade. He has made arrangements with the railways by which preference rates are given to the coast, All that has been done by a comparatively unpaid man who receives a few pounds a year for his services. He has been the standard-bearer of British trade for years. There is no better example in Europe of what a well-trained man can do. If the trade of this country is to be developed we must have a continuous and well organised chain of communications abroad. However we may differ with regard to fiscal policy in this country. I do not think there can be any difference about maintaining our trade in foreign markets, To-day you have Czechslovakia getting almost complete control of the markets in that part of the world. I appeal to the Under-Secretary that he will make representations, bring his influence to bear and take into consideration the re-organisation of our Consular services. It is a magnificent machine if it only gets financial support. So lone as they are cribbed, cabinet and confined within the limits of
a few pounds a year for their personal expenditure, it is impossible to get anything like successful results hope the Under-Secretary will see his way to make the Consular policy one which will reflect on our trade the same as German Consular policy reflected on German trade before the War. I do not want to quote Germany as an example of business organisation, but they did show us how to organise foreign markets The quality of our goads always held their own, but they were crippled by the commercial organisation employed against them. I beg to move the reduction of the Vote by £100, in order that the Under-Secretary for Foreign Affairs may offer some expression of opinion on the points I have raised.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ponsonby): I do not think there is anyone in this House better qualified to talk on this subject than the hon. Gentleman who has just spoken. He speaks from personal knowledge of the various countries, and one is not quite certain as to which country he may be in at a particular moment. I remember on one occasion when I rather gathered he was in Esthonia I found him asking supplementary questions in this House. His knowledge is, therefore, really first hand. But we have a Treasury and a House of Commons, and I am not at all sure that my hon. Friend would get the support of hon. Members around him if he proposed that we should put another £100,000 on the Estimate for Consular Services.
I certainly will bear in mind what the hon. Gentleman has said, and I will do my best to convey his representations to my right hon. Friend the Secretary of State for Foreign Affairs, who realises the enormous importance, not only of having good agents in as many centres as possible, but agents who are well paid and can perform efficiently their duties. I take it my hon. Friend is well satisfied with those who are acting already, and that his desire is rather to give them encouraging support and an increase of salary.

Lieut.-Colonel Sir J. NALL: I want to put a question to the Under-Secretary—

It being Eleven of the Clock, the Chairman left the Chair to make his Report to the House.

Resolution to be reported To-morrow.

Committee report Progress; to sit again To-morrow.

Orders of the Day — TELEGRAPH (MONEY) BILL.

Considered in Committee, and reported, without Amendment; to be read the Third time To-morrow.

Orders of the Day — GAS REGULATION ACT, 1920.

Ordered,
That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Pinner Gas Company, Limited, which was presented on the 9th July, and published, be referred to a Select Committee of Four Members appointed by the Committee of Selection for their Report which s-hall state whether, in their opinion, the Order should be approved with or without modifications or additions, setting out the modifications or additions, if any, which they propose or should not he approved, and shall be laid before the House together with a copy of the Order showing the modifications and additions, if any, proposed by the Committee. That the proceedings of the Committee to which the Order is referred shall be conducted in like manner as in the ease of a Provisional Order Confirmation Bill under Standing Order 151, and opponents
of the Order shall be heard provided that a Statement of Objection has been deposited with the Board of Tract? on or before the seventh day after the date of this Motion, but an opponent shall only be heard upon objections which have been distinctly specified in the Statement.

Ordered,
That any Statement so deposited shall be laid upon the Table of the House by the Board of Trade and shall stand referred to the Committee.

Ordered,
That if no Statement of Objection shall have been deposited within the specified time the reference to the Select Committee shall be discharged."—[Mr. A. V. Alexander.]

Orders of the Day — OPEN SPACES BILL.

Read a Second time, and committed to a Standing Committee.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn"—[Mr. Parkinson.]

Adjourned accordingly at Nine Minutes after Eleven o'Clock.